Q1 2025 Take-Two Interactive Software Inc Earnings Call

Speaker Change: Greetings and welcome to the Take-Two Interactive First Quarter Fiscal Year 2025 Earnings Call. At this time, all participants are in a listen-only mode.

Operator: 5 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

Operator: It is now my pleasure to introduce to you Nicole Shevins, SVP of Investor Relations and Corporate Communications. Thank you, Nicole. You may begin.

Operator: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

Speaker Change: A brief 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 to you Nicole Shevins, SVP of Investor Relations and Corporate Communications.

Operator: As a reminder, this conference is being recorded.

Nicole Shevins: It is now my pleasure to introduce to you Nicole Shevins, SVP of Investor Relations and Corporate Communications.

Unknown Attendee: Thank you, Nicole. You may begin.

Strauss Zelnick: Good afternoon. Thank you for joining our conference call. We will discuss our results for the first quarter of fiscal year 2025 and the June 30, 2024.

Nicole Shevins: Today's call will be led by Strauss Zelnick, Take-Two's Chairman and Chief Executive Officer, Karl Slatoff, our President, and Lainie 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.

Speaker Change: Thank you, Nicole. You may begin.

Nicole Shevins: Good afternoon. Thank you for joining our conference call to discuss our results for the first quarter of fiscal year 2025 and to June 30, 2024. Today's call will be led by Strauss Zelnick, Take-Two's Chairman and Chief Executive Officer, Karl Slatoff, our President, and Lainie Goldstein, our Chief Financial Officer. We will be available to answer your questions during the Q&A session following our prepared remarks.

Strauss Zelnick: Today's call will be led by Strauss Zelnick, Take-Two's chairman and chief executive officer, Karl Slatoff, our president, and Lainie Goldstein, our chief financial officer. We will be available to answer your questions during the Q&A session following our prepared remarks.

Strauss Zelnick: 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 information currently available to us. We have no obligations to update these forward-looking statements. Actual operating results may vary significantly from these forward-looking statements based on a variety of factors.

Nicole Shevins: 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.

Speaker Change: 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.

Speaker Change: 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.

Speaker Change: 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.

Strauss Zelnick: 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.

Strauss Zelnick: I'd also like to note that, unless otherwise stated, all numbers we will be discussing today are gaps in all comparisons or 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 the 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.

Speaker Change: I'd also like to note that, unless otherwise stated, all numbers we will be discussing today are GAP and all comparisons are year over year.

Nicole Shevins: 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. In addition, we have posted on 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 Strauss.

Speaker Change: 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.

Speaker Change: Our press release also contains a reconciliation of any non-GAAP financial measure to the most comparable GAAP measure.

Speaker Change: 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 TakeTwoGames.com. And now I'll turn the call over to Strauss.

Strauss Zelnick: Our press release and filings with the SEC, Navy, have seen from our website at TakeTwoGames.com, and now I'll turn the call over to Strauss.

Strauss Zelnick: Thanks, Nicole. Good afternoon, and thank you for joining us today. I'm pleased to report that fiscal year 2025 is off to a solid start. Our first quarter net bookings of $1.2 billion were in line with our expectations, and our management team remains highly confident in our path forward. We're reiterating our netbookings outlook for the year.

Strauss Zelnick: Thanks, Nicole.

Strauss Zelnick: Good afternoon, and thank you for joining us today. I'm pleased to report that fiscal year 2025 is off to a solid start. Our first quarter net bookings of $1.2 billion were in line with our expectations, and our management team remains highly confident in our path forward. We're reiterating our net bookings outlook for the year. As we release our groundbreaking pipeline, we expect to achieve tremendous growth, including sequential increases and net bookings in fiscal 2026 and 2027.

Strauss: Thanks, Nicole. Good afternoon, and thank you for joining us today. I'm pleased to report that fiscal year 2025 is off to a solid start. Our first quarter net bookings of $1.2 billion were in line with our expectations, and our management team remains highly confident in our path forward.

Strauss Zelnick: As we release our groundbreaking pipeline, we expect to achieve tremendous growth, including sequential increases in netbookings in fiscal 2026 and 2027. I'd like to thank our talented teams across our labels for their boundless passion, hard work, and dedication to our mission. Now, turning to our business highlights from the quarter.

Strauss: We're reiterating our netbooking's outlook for the year. As we release our groundbreaking pipeline, we expect to achieve tremendous growth, including sequential increases in netbookings in fiscal 2026 and 2027.

Strauss Zelnick: I'd like to thank our talented teams across our labels for their boundless passion, hard work, and dedication to our mission.

Strauss: I'd like to thank our talented teams across our labels for their boundless passion, hard work, and dedication to our mission.

Strauss Zelnick: Now, turning to our business highlights from the quarter. The Grand Theft Auto series exceeded our expectations, as momentum continues to build ahead of the launch of Grand Theft Auto 6 in fall 2025. Unit sales for Grand Theft Auto V continued growth, and to date the title is sold in over 200 million units. Grand Theft Auto Online also surpassed our projections, led by its summer content pack, Bottom-Dollar Bounties, which launched to 2025. The audience for Rockstar's premium membership service GTA Plus grew strong double digits over last year, with Rockstar Games offering its members an array of valuable benefits arranged from enhancing the in-game experience to providing access to their classic titles, including the recent addition of Illinois.

Strauss Zelnick: The Grand Theft Auto series exceeded our expectations as momentum continues to build ahead of the launch of Grand Theft Auto VI in Fall 2025. Unit sales for Grand Theft Auto V continue to grow, and to date, the title has sold over 200 million units. Grand Theft Auto Online also surpassed our projections, led by its summer content pack, Bottom Dollar Bounties, which launched June 25th. The audience for Rockstar's premium membership service, GTA+, grew by strong double digits over last year, with Rockstar Games offering its members an array of valuable benefits that range from enhancing the in-game experience to providing access to their classic titles, including the recent addition of L.A. Noire

Strauss: Now, turning to our business highlights from the quarter.

Speaker Change: The Grand Theft Auto series exceeded our expectations as momentum continues to build ahead of the launch of Grand Theft Auto VI in Fall 2025.

Strauss: Unit sales for Grand Theft Auto V continue to grow, and to date the title has sold in over 200 million units.

Strauss: GrantTheft.Online also surpassed our projections, led by its summer content pack, Bottom Dollar Bounties, which launched June 25th.

Strauss: The audience for Rockstar's premium membership service, GTA+, grew strong double digits over last year, with Rockstar Games offering its members an array of valuable benefits that range from enhancing the in-game experience to providing access to their classic titles, including the recent addition of L.A. Noire.

Strauss Zelnick: We're pleased with the performance of Red Dead Redemption 2, which has sold in more than 65 million units to date. In addition, Red Dead Online continued to engage its audience during the period with new monthly bonuses and free outfits inspired by top content creators within the Red Dead community. NBA 2K24 delivered a solid quarter, and today has sold in close to 11 million units. Engagement remains strong, with users playing more frequently and participating in more games compared to NBA 2K23 for the same period last year. The franchise continues to expand its audience through several innovative mobile experiences, including NBA 2K24 My Team, a free-to-play card collecting experience that has been downloaded nearly 3 million times since the launch in February.

Strauss Zelnick: We're pleased with the performance of Red Dead Redemption 2, which has sold more than 65 million units to date. In addition, Red Dead Online continued to engage its audience during the period with new monthly bonuses and free outfits inspired by top content creators within the Red Dead community. NBA 2K24 delivered a solid quarter and, to date, has sold close to 11 million units. Engagement remains strong, with users playing more frequently and participating in more games compared to NBA 2K23 for the same period last year.

Strauss: We're pleased with the performance of Red Dead Redemption 2, which has sold in more than 65 million units to date.

Strauss: In addition, Red Dead Online continued to engage its audience during the period with new monthly bonuses and free outfits inspired by top content creators within the Red Dead community.

Speaker Change: NBA 2K24 delivered a solid quarter and to date has sold in close to 11 million units.

Strauss: Engagement remains strong, with users playing more frequently and participating in more games compared to NBA 2K23 for the same period last year.

Strauss Zelnick: The franchise continues to expand its audience through several innovative mobile experiences, including NBA 2K24 MyTeam, a free-to-play card collecting experience that has been downloaded nearly 3 million times since its launch in February. Moreover, NBA 2K24 Arcade Edition continues to enjoy huge success on Apple Arcade and is consistently a top two game on the service.

Strauss: The franchise continues to expand its audience through several innovative mobile experiences, including NBA 2K24 MyTeam, a free-to-play card collecting experience that has been downloaded nearly 3 million times since its launch in February.

Strauss Zelnick: Moreover, NBA 2K24 Arcade Edition continues to enjoy huge success on Applarkade and is consistently a top-two game on the service. WWE 2K24, which launched at the end of fiscal 2024, is continued to grow its audience and enhance its profitability. Our teams have driven meaningful engagement through the release of several content packs, with more on the way. To date, players have logged 27 million hours of gameplay across more than 200 million matches featuring a series-high roster of over 300 past and present superstars.

Strauss: Moreover, NBA 2K24 Arcade Edition continues to enjoy huge success on Apple Arcade and is consistently a top-two game on the service.

Strauss Zelnick: WWE 2K24, which launched at the end of fiscal 2024, has continued to grow its audience and enhance its profitability. Our teams have driven meaningful engagement through the release of several content packs, with more on the way. To date, players have logged 27 million hours of gameplay across more than 200 million matches. Featuring a series high roster of over 300 past and present superstars. On April 4th, 2K and Cat Daddy Games released NFL 2K Playmakers, a new free-to-play mobile title that allows fans to collect NFL player cards and assemble an exciting roster of offensive, defensive, and special teams.

Speaker Change: WWE 2K24, which launched at the end of fiscal 2024, has continued to grow its audience and enhance its profitability. Our teams have driven meaningful engagement through the release of several content packs, with more on the way. To date, players have logged 27 million hours of gameplay across more than 200 million matches.

Speaker Change: featuring a series high roster of over 300 past and present superstars.

Strauss Zelnick: On April 4, 2K and Cat Daddy Games released NFL 2K Playmakers, a new free-to-play mobile title that allows fans to collect NFL player cards and assemble an exciting roster of offensive, defensive, and special teams. We're proud to add NFL 2K Playmakers to our ever-expanding mobile portfolio in partnership with the NFL and the NFL Players Association.

Speaker Change: On April 4th, 2K and Cat Daddy Games released NFL 2K Playmakers, a new free-to-play mobile title that allows fans to collect NFL player cards and assemble an exciting roster of offensive, defensive, and special teams.

Strauss Zelnick: We're proud to add NFL2K Playmakers to our ever-expanding mobile portfolio in partnership with the NFL and the NFL Players Association. On April 26, 2K and Hangar 13 launched Topspin 2K25, marking the return of our popular tennis franchise after a 13-year hiatus. The title was well received by critics and fans alike, who praised its authentic tennis experience and deep personalization, and Legendary Venues. 2K is sporting top spin with a series of center court passes that feature iconic courts, brands, and tournaments.

Speaker Change: We're proud to add NFL2K Playmakers to our ever-expanding mobile portfolio in partnership with the NFL and the NFL Players Association.

Strauss Zelnick: On April 26, 2K and Hanger 13 launched Topspin 2K25, marking the return of our popular tennis franchise after a 13-year hiatus. The title was well received by critics and fans alike, who praised its authentic tennis experience, deep personalization, and legendary venues. 2K is supporting Topspin with a series of center court passes that feature iconic courts, brands, and tournaments.

Speaker Change: On April 26th, 2K and Hangar 13 launched Topspin 2K25, marking the return of our popular tennis franchise after a 13-year hiatus.

Speaker Change: The title was well received by critics and fans alike who praised its authentic tennis experience, deep personalization,

Speaker Change: and Legendary Venues, 2K's sporting top spin with a series of center court passes that feature iconic courts, brands, and tournaments.

Strauss Zelnick: During the period, we added to the caliber of our world-class development teams with our acquisition of Gearbox Entertainment. We're thrilled to welcome Randy Pitchford and his studio to the Take-Two and 2K family. We've identified many potential growth opportunities for the Borderlands series and Gearbox's catalog.

Strauss Zelnick: During this period, we added to the caliber of our world-class development teams with our acquisition of Gearbox Entertainment. We're thrilled to welcome Randy Pitchford and his studio to the Take-Two and 2K family. We've identified many potential growth opportunities for the Borderlands series and Gearbox's catalog. In addition, tomorrow marks the box office debut of the star-studded Borderlands feature film from Lionsgate, and we hope that audiences will enjoy experiencing the series' vibrant and character-driven world on the big screen.

Speaker Change: During the period, we added to the caliber of our world-class development teams with our acquisition of Gearbox Entertainment. We're thrilled to welcome Randy Pitchford and his studio to the Take-Two and 2K family.

Speaker Change: We've identified many potential growth opportunities for the Borderlands series and Gearbox's catalog.

Strauss Zelnick: In addition, tomorrow marks the box-office view of the star-studded Borderlands feature film from Lionsgate. We hope that audiences will enjoy experiencing the series' vibrant and character-driven world on the big screen.

Speaker Change: In addition, tomorrow marks the box office debut of the star-studded Borderlands feature film from Lionsgate, and we hope that audiences will enjoy experiencing the series' vibrant and character-driven world on the big screen.

Strauss Zelnick: Zingga delivered another solid quarter, including phenomenal performance at peak. Match factory is scaling quickly and is established itself as one of Zingga's largest contributors to net bookings. The title is responding well to our investment in user acquisition. Reflected in net bookings growth of more than 50% over last quarter, we believe that there are even more growth opportunities ahead as we add new features and up. updates. Dunblass delivered strong, year-over-year growth for the third consecutive quarter. As the title celebrates its seventh anniversary this month, we're pleased that it has become a top-time grossing game in the US App Lab store this quarter and has achieved more than $2.5 billion in lifetime gross bookings.

Strauss Zelnick: Zynga delivered another solid quarter, including phenomenal performance at peak. Match Factory is scaling quickly and has established itself as one of Zynga's largest contributors to netbooking. The title is Responding Well to Our Investment in User Acquisition, reflected in Netbooking's growth of more than 50% over last quarter. We believe that there are even more growth opportunities ahead as we add new features and updates. Dune Blast delivered strong year-over-year growth for the third consecutive quarter.

Speaker Change: Zeng is delivered in another solid quarter, including phenomenal performance at peak. Matt Factory is scaling quickly and is established itself as one of Zeng's largest contributors to net bookings.

Speaker Change: The title is Responding Well to Our Investment in User Acquisition.

Speaker Change: Reflected in Netbooking's growth of more than 50% over last quarter, we believe that there are even more growth opportunities ahead as we add new features and updates.

Speaker Change: Dune Blast delivered strong year-over-year growth for the third consecutive quarter. As the title celebrates its seventh anniversary this month, we're pleased that it has become a top 10 grossing game in the U.S. Apple App Store this quarter and has achieved more than $2.5 billion in lifetime gross bookings.

Strauss Zelnick: The title celebrates its 7th anniversary this month, and we're pleased that it has become a top 10 grossing game in the U.S. Apple App Store this quarter and has achieved more than $2.5 billion in lifetime revenue. On June 4th, Zynga and Lucasfilm Games launched Star Wars Hunters, the label's first ever cross-platform title, which is available for free on Nintendo Switch, iOS, and Android devices. Expanding the iconic Star Wars universe with new locations and characters, the competitive battle arena game received a tremendous amount of fanfare from the media and audiences around the globe.

Strauss Zelnick: On June 4, Zinget and Lucasfilm Games launched Star Wars Hunters. The labels first ever-across platform title, which is available for free on Nintendo Switch and iOS and Android devices. Expanding the iconic Star Wars universe with new locations and characters, the competitive battle arena game received a tremendous amount of fanfare from the media and audiences around the globe. Players can look forward to additional content offerings coming soon. Our blended six billion all-time downloads. Fan-favorite titles Screw Jam and Twisted Tangle both performed well, discording becoming top 50 and top 100 grossing games respectively in the US App Lab store.

Speaker Change: On June 4th, Zynga and Lucasfilm Games launched Star Wars Hunters, the label's first-ever cross-platform title which is available for free on Nintendo Switch and iOS and Android devices.

Speaker Change: Expanding the iconic Star Wars universe with new locations and characters, the competitive battle arena game received a tremendous amount of fanfare from the media and audiences around the globe. Players can look forward to additional content offerings coming soon.

Strauss Zelnick: Players can look forward to additional content offerings coming soon. Our blended monetization efforts in Hypercasual are progressing well at Rollick, which costs $3.6 billion all-time download. Fan-favorite titles, Screw Jam and Twisted Tangle, both performed well-discord or became top 50 and top 100 grossing games, respectively, in the U.S. Apple App Store. Our direct-to-consumer business continues to grow, and our teams are working actively to add more titles each quarter to this highly creative, owned distribution channel.

Speaker Change: Our blended monetization efforts in Hypercasual are progressing well at Rollick, which costs $3.6 billion all-time downloads.

Speaker Change: Fan favorite titles Screw Jam and Twisted Tangle both performed well this quarter, becoming top 50 and top 100 grossing games, respectively, in the U.S. Apple App Store.

Strauss Zelnick: Our direct-to-consumer business continues to grow, and our teams are working actively to add more titles each quarter to this highly accretive-owned distribution channel.

Speaker Change: Our direct-to-consumer business continues to grow, and our teams are working actively to add more titles each quarter to this highly creative, owned distribution channel.

Strauss Zelnick: Looking ahead, Zynga has numerous titles in development and soft launch, including the latest installment in their popular racing franchise, CSR Racing 3. In closing, I believe that our talented creative teams and owned portfolio of iconic entertainment franchises are driving both the consistent performance of our company and our potential to achieve unprecedented levels of multi-year growth. As we focus on our strategic priorities and embody our core tenets of creativity, innovation, and efficiency, I'm confident that we'll set new benchmarks for our industry and deliver strong returns for our shareholders. I'll now turn the call over to Karl.

Strauss Zelnick: Looking ahead, Zinget has numerous titles in development and top launch, including the latest installment in their popular racing franchise, CSR Racing 3.

Speaker Change: Looking ahead Zelnick has numerous titles in development and soft launch, including the latest installment in their popular racing franchise, CSR Racing 3.

Strauss Zelnick: In closing, I believe that there are talented creative teams and own portfolio of iconic entertainment franchises are driving both the consistent performance of our company and our potential to achieve unprecedented levels of multi-year growth. As we focus on our strategic priorities and embody our core tenets of creativity, innovation, and efficiency, I'm confident that we'll set new benchmarks for our industry and deliver strong returns for our shareholders.

Speaker Change: In closing, I believe there are talented creative teams and own portfolio of iconic entertainment franchises, are driving both the consistent performance of our company.

Speaker Change: and our potential to achieve unprecedented levels of multi-year growth. As we focus on our strategic priorities and embody our core tenets of creativity, innovation, efficiency, I'm confident that we'll set new benchmarks for our industry and deliver strong returns for our shareholders.

Karl Slatoff: I'll now turn the call over to Carl. Thanks, Ralph. I'd like to thank our teams for continuing to deliver immersive and engaging entertainment experiences that are strengthening the foundation for our long-term success, starting to our recent releases and announced offerings for the current year. On July 25, Zinget launched a new puzzle RPG title, Game of Thrones Legends, which invites players to journey through the magical land of Westeros, featuring characters, lawyers, and storylines from HBO's popular Game of Thrones and House of the Dragon franchises. The game marked the exciting return of Emmy and Golden Globe-nominated actor Kit Harrington to the franchise, who also starred in a marketing campaign set in the title's immersive world.

Karl Slatoff: Thanks, Strauss. I'd like to thank our teams for continuing to deliver immersive and engaging entertainment experiences that are strengthening the foundation for our long-term success. According to our recent releases and announced offerings for the current, On July 25th, Zynga launched a new puzzle RPG title, Game of Thrones Legends, which invites players to journey through the magical land of Westeros, featuring characters, lores, and storylines from HBO's popular Game of Thrones and House of the Dragon franchise.

Speaker Change: I'll now turn the call over to Karl.

Karl: Thanks, Strauss. I'd like to thank our teams for continuing to deliver immersive and engaging entertainment experiences that are strengthening the foundation for our long-term success.

Karl: According to our recent releases and announced offerings for the current year.

Speaker Change: On July 25th, Zengal launched a new puzzle RPG title, Game of Thrones Legends, which invites players to journey through the magical land of Westeros, featuring characters, lowers, and storylines from HBO's popular Game of Thrones and House of the Dragon franchises.

Karl Slatoff: The game marked the exciting return of Emmy and Golden Globe nominated actor Kit Harington to the franchise, who also starred in a marketing campaign set in the title's immersive world. Player reception has been positive, with the title entering the top 10 in the overall free games category on the US Apple App Store and on Google Play in the US. 2K and Visual Concepts will once again set new standards of excellence and realism for basketball in our industry with the launch of NBA 2K25.

Karl: The game marked the exciting return of Emmy and Golden Globe nominated actor Kit Harington to the franchise, who also starred in a marketing campaign set in the title's immersive world.

Karl Slatoff: Player reception has been positive, with the title entering the top ten in the overall free games category on the U.S. Apple App Store and on Google Play in the U.S.

Speaker Change: Player reception has been positive with the title entering the top 10 in the overall free games category on the U.S. Apple App Store and on Google Play in the U.S.

Karl Slatoff: Two came visual concepts. Well, once again set new standards of excellence and realism for basketball or in our industry with a launch of NBA 2K25. The title officially launches on September 6th, and we are excited to offer fans that have pre-ordered the game the ability to play up to two days early. Players will be able to forge a dynasty in My Career and compete in the new My Team modes. Those on Gen 9 platforms will experience an added 6th era in My NBA, a more dense and interactive city, and the chance to cement their GOAT status in the W.

Speaker Change: 2K and Visual Concepts will once again set new standards of excellence and realism for basketball in our industry with the launch of NBA 2K25.

Karl Slatoff: The title officially launches on September 6th, and we are excited to offer fans that have pre-ordered the game the ability to play up to two days early. Players will be able to forge a dynasty in MyCareer and compete in the new MyTeam mode. Those on Gen 9 platforms will experience an added sixth era in MyNBA, a more dense and interactive City, and the chance to cement their goat status in the W. We are thrilled that Visual Concepts will release the Gen 9 version of NBA 2K25 for PC, which will provide our passionate community access to our series' most advanced gameplay and stunning graphics.

Speaker Change: The title officially launches on September 6th, and we are excited to offer fans that have pre-ordered the game the ability to play up to two days early.

Speaker Change: Players will be able to forge a dynasty in my career and compete in the new my team modes.

Speaker Change: Those on Gen 9 platforms will experience an added 6th era in my NBA, a more dense and interactive city and the chance to cement their goat status in the W.

Karl Slatoff: We are thrilled that Visual Concepts will release the Gen 9 version of NBA 2K25 for PC, which will provide our passionate community access to our series' most advanced gameplay and stunning graphics.

Speaker Change: We are thrilled that visual concepts will release the Gen 9 version of NBA 2K 25 for PC, which will provide our passionate community access to our series most advanced gameplay and stunning graphics.

Karl Slatoff: Today, we'll have more details to share about the game leading up to its launch. In addition, Visual Concepts is currently developing WWE TK25, which promises to take our successful pro wrestling franchise to new heights when it launches later this fiscal year. Later this month, 2K and 4-Access Games will reveal more details about the eagerly-anticipated launch of Sid Meier's Civilization VII, a revolutionary new chapter in our epic strategy video game. In this 4X strategy game, players can establish their civilization and construct cities and architectural wonders to expand their territory, conquer or cooperate with rival civilizations, and explore the far reaches of the unknown world.

TK: TK will have more details to share about the game leading up to its launch.

Speaker Change: In addition, Visual Concepts is currently developing WWE 2K25, which promises to take our successful pro wrestling franchise to new heights when it launches later this fiscal year.

Karl Slatoff: Later this month, 2K for Access Games will reveal more details about the eagerly anticipated launch of Sid Meier's Civilization VII, a revolutionary new chapter in our Epic Strategy Video Game franchise. In closing, as we continue to execute upon our strategy, we believe that there are many opportunities that will enable us to deliver a period of significant margin expansion, long-term growth, and shareholder returns for take-off.

Speaker Change: Later this month, 2K and 4-Access Games will reveal more details about the eagerly anticipated launch of Sid Meier's Civilization VII, a revolutionary new chapter in our epic strategy video game franchise.

Speaker Change: In this 4X strategy game, players can establish their civilization and construct cities and architectural wonders to expand their territory, conquer or cooperate with rival civilizations, and explore the far reaches of the unknown world.

Karl Slatoff: We can't wait for CIFF fans around the world to enjoy what promises to be the best title in the series' 30-year history. We have also successfully launched a mobile civilization game in China through our partnership with Tencent, and we are pleased that the title hit number one on the iOS and Android stores at launch. In closing, as we continue to execute upon our strategy, we believe that there are many opportunities that will enable us to deliver a period of significant margin expansion, long-term growth, and shareholder returns for Take-Two. I'll now turn the call over to Lainie.

Speaker Change: We can't wait for Sith fans around the world to enjoy what promises to be the best title in the series 30-year history.

Speaker Change: We also successfully launched a mobile civilization game in China through our partnership with Tencent and are pleased that the title hit number one on iOS and Android stores at launch.

Speaker Change: In closing, as we continue to execute upon our strategy, we believe that there are many opportunities that will enable us to deliver a period of significant margin expansion, long-term growth, and shareholder returns for Take-Two.

Lainie Goldstein: Thanks, Carl, and good afternoon, everyone. We achieved solid first quarter results by engaging our players with exciting new game releases and content updates while maintaining our focus on efficiency. We continue to have great confidence in our ability to deliver a multi-year period of growth. Our core franchises remain healthy; our teams are hard at work on the most ambitious development pipeline in our company's history, and we remain focused on new growth opportunities to enhance our business model and financial profile.

Lainie Goldstein: Thanks Karl, and good afternoon everyone. We achieved solid first quarter results by engaging our players with exciting new game releases and content updates while maintaining our focus on efficiency. We continue to have great confidence in our ability to deliver a multi-year period of growth. Our core franchises remain healthy, our teams are hard at work on the most ambitious development pipeline in our company's history, and we remain focused on new growth opportunities to enhance our business model and financial profile. I'd like to thank our teams for enabling us to captivate millions of players every day and for their unwavering support of our long-term vision.

Speaker Change: I'll now turn the call over in Lainie.

Lainie: Thanks Karl and good afternoon everyone. We achieved solid first quarter results by engaging our players with exciting new game releases and content updates while maintaining our focus on efficiency.

Lainie: We continue to have great confidence in our ability to deliver a multi-year period of growth. Our core franchises remain healthy, our teams are hard at work on the most ambitious development pipeline in our company's history, and we remain focused on new growth opportunities to enhance our business model and financial profile.

Lainie Goldstein: I'd like to thank our teams for enabling us to captivate millions of players every day and for their unwavering support for our long-term vision. During our results, we delivered first quarter net bookings of $1.22 billion, which was in line with our guidance range of $1.2 to $1.25 billion. Recurring consumer spending was flat for the period and accounted for 83% of net bookings. Mobile increased mid-single digits driven by the addition of match factor rate and growth in June last, which was partially upset by declines in our hyper-casual mobile portfolio and Empires and Puzzles. Grand Theft Auto Online and NBA 2K were both down.

Speaker Change: I'd like to thank our teams for enabling us to captivate millions of players every day and for their unwavering support for our long-term vision.

Lainie Goldstein: According to our results, we delivered first quarter net bookings of $1.22 billion, which was in line with our guidance range of $1.2 to $1.25 billion. Recurrent consumer spending was flat for the period and accounted for 83% of net bookings. Mobile increased mid-single digits driven by the addition of Match Factory and growth in Toon Blast, which was partially offset by declines in our hyper-casual mobile portfolio and empires in Puzzle. Grand Theft Auto Online and NBA 2K were both down.

Speaker Change: According to our results, we delivered first-quarter net bookings of $1.22 billion, which was in line with our guidance range of $1.2 to $1.25 billion.

Speaker Change: Recurrent consumer spending was flat for the period and accounted for 83% of net bookings.

Speaker Change: Mobile increased mid-single digits driven by the addition of Match Factory and growth in Toon Blast, which was partially offset by declines in our hyper-casual mobile portfolio in Empires and Puzzles.

Lainie Goldstein: During the quarter, we launched Topspin 2K25, No Refs for the Wicked on Early Access for PC, NFL 2K Playmakers, and Star Wars Hunter. Gap net revenue increased 4% to $1.34 billion, while cost of revenue declined 6% to $567 million, and operating expenses increased by 8% to $956 million. On a management basis, operating expenses rose 12% year-over-year, which was better than our forecast due to lower R&D and marketing costs. Turning to our guidance, I'll begin with our full fiscal year expectations.

Lainie Goldstein: During the quarter, we launched Hopspin 2K25, No Rest for the Wicked on early access for PC, NFL 2K Playmakers, and Star Wars Hunters. GapNet revenue increased 4% to $1.34 billion, while cost of revenue declined 6% to $567 million, and operating expenses increased by 8% to $956 million. On a management basis, operating expenses rose 12% over a year, which was better than our forecast due to lower R&D and marketing costs.

Speaker Change: Grand Theft Auto Online and NBA 2K were both down.

Speaker Change: During the quarter, we launched Topspin 2K25, No Rest for the Wicked on Early Access 4PC, NFL 2K Playmakers, and Star Wars Hunters.

Speaker Change: Gap net revenue increased 4% to $1.34 billion, while cost of revenue declined 6% to $567 million, and operating expenses increased by 8% to $956 million.

Speaker Change: On a management basis, operating expenses rose 12% year-over-year, which was better than our forecast due to lower R&D and marketing costs.

Lainie Goldstein: Turning to our guidance, I'll begin with our full fiscal year X- and expectations. Our business is performing well, and as Strauss mentioned, we are reiterating our net bookings outlook range of $5.55 to $5.65 billion, which represents 5% growth over fiscal 2024. The largest contributors to net bookings are expected to be NBA 2K, the Grand Theft Auto series, Tune Blast, or hypo-casual mobile portfolio, Match Factory, Empires and Puzzles, the Red Dead Redemption series, Sinmire Civilization 7, and Words With Friends. We continue to expect for current consumer spending growth of approximately 3%, representing 77% of net bookings.

Lainie Goldstein: Our business is performing well, and as Strauss mentioned, we are reiterating our net bookings outlook range of $5.55 to $5.65 billion, which represents 5% growth over fiscal 2024. The largest contributors to Netbookings are expected to be MBA2K, the Grand Theft Auto series, Toon Blast, our hyper-casual mobile portfolio, Match Factory, Empires and Puzzles, the Red Dead Redemption series, We continue to expect recurrent consumer spending growth of approximately 3%, representing 77% of net bookings.

Speaker Change: Turning to our guidance, I'll begin with our full fiscal year expectations.

Speaker Change: Our business is performing well, and as Strauss mentioned, we are reiterating our net bookings outlook range of $5.55 to $5.65 billion, which represents 5% growth over fiscal 2024.

Speaker Change: The largest contributors to NetBookings are expected to be NBA2K, the Grand Theft Auto series, Toon Blast, our hyper-casual mobile portfolio, Match Factory, Empires and Puzzles, the Red Dead Redemption series, Sinmaior Civilization VII, and Words with Friends.

Speaker Change: We continue to expect recurrent consumer spending growth of approximately 3%, representing 77% of net bookings.

Lainie Goldstein: Our current consumer spending forecast seems a high single-digit increase for mobile, driven by Match Factory and Tune Blast, which are partially upset by declines in our Hypo-Casual mobile portfolio and Empires and Puzzles. We expect flat results for NBA 2K and as declines for Grand Theft Auto Online. We expect the net bookings breakdown from our labels to be roughly 50% single, 32% 2K, 17% rocks are games, and 1% other. And we forecast our geographic net bookings to be about 60% United States, and 40% international. We now expect non-GAP suggested unrestricted operating cash flow to be an outflow of $150 million, and we plan to deploy approximately $140 million of capital expenditures, primarily for game technology and office buildouts.

Lainie Goldstein: Our current consumer spending forecast assumes a high single-digit increase for mobile, driven by Match Factory and Toon Blast, which are partially offset by declines in our hyper-casual mobile portfolio and Empires and Puzzles. We expect flat results for MBA 2K and a decline for Grand Theft Auto Online. We expect the net bookings breakdown from our labels to be roughly 50% Zynga, 32% 2K, 17% Rockstar Games, and 1% other. And we forecast our geographic net bookings split to be about 60% United States and 40% international.

Speaker Change: Our current consumer spending forecast assumes a high single-digit increase for mobile, driven by Match Factory and Toon Blast, which are partially offset by declines in our hyper-casual mobile portfolio and Empires and Puzzles. We expect flat results for NBA 2K and a decline for Grand Theft Auto Online.

Speaker Change: We expect a net-booking breakdown from our label to be roughly 50% single, 32% 2K, 17% rocks are games and 1% other. And we forecast our geographic net-booking split to be about 60% United States and 40% international.

Lainie Goldstein: We now expect non-GAAP-adjusted unrestricted operating cash flow to be an outflow of $150 million, and we plan to deploy approximately $140 million of capital expenditures, primarily for game technology and office build-out. We expect GAAP net revenue to range from $5.57 to $5.67 billion, and cost of revenue to range from $2.38 to $2.41 billion. The total operating expenses are expected to range from $3.7 to $3.72 billion, as compared to $5.83 billion last year.

Speaker Change: We now expect non-GAAP-adjusted, unrestricted operating cash flow to be an outflow of $150 million, and we plan to deploy approximately $140 million of capital expenditures, primarily for game technology and office build-outs.

Lainie Goldstein: We expect GapNet revenue to range from $5.57 to $5.67 billion, and cost of revenue to range from $2.38 to $2.41 billion. The total operating expenses are expected to range from $3.7 to $3.72 billion, as compared to $5.83 billion last year. On a management basis, we expect operating expense growth to approximately 10% year over year. This is largely due to an increase in ongoing marketing support for Match Factory, as well as other mobile and immersive core launches planned for the year. The addition of gearbox and higher personnel costs, partially upset by saving from our cost reduction program.

Speaker Change: We expect cabinet revenue to range from 5.57 to 5.67 billion dollars and cost of revenue to range from 2.38 to 2.41 billion dollars.

Speaker Change: The total operating expenses are expected to range from $3.7 to $3.72 billion, as compared to $5.83 billion last year.

Lainie Goldstein: On a management basis, we expect operating expense growth of approximately 10% year-over-year. This is largely due to an increase in ongoing marketing support for Match Factory, as well as other mobile and immersive core launches planned for the year. The addition of Gearbox and higher personnel costs will be partially offset by savings from our cost reduction program.

Speaker Change: On a management basis we expect operating expenses growth for approximately 10% year over year. This is largely due to an increase in ongoing marketing support for mass factory, as well as other mobile and immersive core launches planned for the year.

Speaker Change: The addition of Gearbox and higher personnel costs partially offset by savings from our cost reduction program.

Lainie Goldstein: Excluding incremental marketing and the addition of gearbox, our operating expenses are expected to grow low single digits over last year.

Lainie Goldstein: Excluding incremental marketing and the addition of Gearbox, our operating expenses are expected to grow low single digits over last year. Now moving on to our guidance for the fiscal second quarter, we project net bookings to range from $1.42 to $1.47 billion compared to $1.44 billion in the second quarter of last year. Our release dates for the quarter include Game of Thrones Legends and NBA 2K25. The largest contributors to Netbookings are expected to be NBA2K, The Grand Theft Auto Series, Toon Blast, Smash Factory, Our Hyper-Casual Mobile Portfolio, Empires and Puzzles, Words with Friends, The Red Dead Redemption Series, and Merge Dragons.

Speaker Change: Excluding incremental marketing and the addition of gearbox, our operating expenses are expected to grow low single digits over the last year.

Lainie Goldstein: Now moving on to our guidance for the fiscal second quarter, we project net bookings to range from $1.42 to $1.47 billion, compared to $1.44 billion in the second quarter last year. Our release date for the quarter includes Game of Thrones Legends and MBA2K25. The largest contributors to net bookings are expected to be MBA2K, the grant of daughter series, Tomblass, Match Factory, our high pro casual mobile portfolio, Empires and Puzzles, Words with Friends, the Red Dead Redemption series, and Merge Dragons. We project with current consumer spending to increase by approximately 5%, which assumes a low double-digit increase from mobile driven by the addition of Match Factory and growth in Tomblass, which are partially upset by declines in our high pro casual mobile portfolio and Empires and Puzzles.

Speaker Change: Now moving on to our guidance for the fiscal second quarter. We project networking's terrain from 1.42 to 1.47 billion dollars, compared to 1.44 billion dollars in the second quarter last year. Our release site for the quarter includes Game of Thrones Legends and MBA2K25.

Speaker Change: The largest contributors to networkings are expected to be MBA-2K, the grant of daughter series, tune-blast, match factory, or high-professional mobile portfolio, and partisan puzzles for its friends, the Red Dead Redemption series, and merge dragons.

Lainie Goldstein: We project recurrent consumer spending to increase by approximately 5%, which assumes a low double-digit increase for mobile, driven by the addition of Match Factory and growth in Toon Blast, which are partially offset by declines in our hyper-casual mobile portfolio and Empires and Puzzles. We expect flat results for MBA2K and a decline for GroundDevData Online. Estimated Gap Net revenue to range from $1.29 to $1.34 billion. Operating expenses are planned to range from $982 to $992 million.

Speaker Change: We project recurrent consumer spending to increase by approximately 5%, which assumes a low double-digit increase for mobile, driven by the addition of Match Factory and growth in Toon Blast, which are partially offset by declines in our hyper-casual mobile portfolio in Empires and Puzzles.

Lainie Goldstein: We expect flat results for MBA2K and it declines with grant of daughter online. We expect gap net revenue to range from $1.29 to $1.34 billion. Operating expenses are planned to range from $982 to $992 million. On a management basis, operating expenses are expected to grow by approximately 27% year over year, which is primarily driven by additional marketing from Match Factory, the Game of Thrones Legends, and the addition of Gearbox, partially upset by savings from our cost reduction. Program.

Speaker Change: We expect flat results for MBA 2K and a decline for Grand Theft Auto Online.

Speaker Change: We expect GAAP net revenue to range from $1.29 to $1.34 billion.

Speaker Change: Auburning expenses are planned to rain from 982, 992 million dollars.

Lainie Goldstein: On a management basis, operating expenses are expected to grow by approximately 27% year-over-year, which is primarily driven by additional marketing from Match Factory, the Game of Thrones legends, and the addition of Gearbox, partially offset by savings from our cost reduction program. In closing, we are confident in our ability to deliver a strong multi-year trajectory of growth driven by our industry-leading talent, our diverse portfolio of iconic owned intellectual properties, and our groundbreaking development pipeline.

Speaker Change: On a management basis, operating expenses are expected to grow by approximately 27% year-over-year, which is primarily driven by additional marketing from match-factorry, a game of thrones, legends, and the addition of gearbox, partially offset by saving some of our cost reduction programs.

Lainie Goldstein: In closing, we are confident in our ability to deliver a strong multi-year trajectory of growth to provide our industry-leading talent, our diverse portfolio of iconic, owned intellectual properties, and our groundbreaking development pipeline. As we capitalize on our competitive advantages and pursue our strategic priorities, we believe that we will continue to grow our business, enhance our profitability, and deliver long-term value for our shareholders.

Speaker Change: In closing, we are confident in our ability to deliver a strong multi-year trajectory of growth, driven by our industry-leading talent, our diverse portfolio of iconic, own intellectual properties, and our groundbreaking development pipeline.

Lainie Goldstein: As we capitalize on our competitive advantages and pursue our strategic priorities, we believe that we will continue to grow our business, enhance our profitability, and deliver long-term value for our shareholders. Thank you. I'll now turn the call back to Strauss.

Speaker Change: As we capitalize on our competitive advantages and pursue our strategic priorities, we believe that we will continue to grow our business, enhance our profitability, and deliver long-term value for our shareholders.

Strauss Zelnick: Thank you. I'll now turn the call back to Strauss. Thanks, Lainie and Karl. On behalf of our entire management team, I'd like to thank our colleagues for delivering results consistently to reflect our unique ability to provide the highest quality and most engaging entertainment offerings to our player communities.

Strauss Zelnick: Thanks, Lainie and Karl. On behalf of our entire management team, I'd like to thank our colleagues for delivering results consistently that reflect our unique ability to provide the highest quality and most engaging entertainment offerings to our player community. To our shareholders, I want to express our appreciation for your continued support. We will now take your questions. Operator. Thank you, sir. We will now be conducting

Speaker Change: Thank you. I'll now turn the call back to Strauss.

Strauss: Thanks, Lainie and Karl. On behalf of our entire management team, I'd like to thank our colleagues for delivering results consistently that reflect our unique ability to provide the highest quality and most engaging entertainment offerings to our player communities.

Strauss Zelnick: To our shareholders, I want to express our appreciation for your continued support. We'll now take your questions.

Speaker Change: To our shareholders, I want to express our appreciation for your continued support.

Operator: Operator? Thank you, sir. We will now be conducting the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star two to remove a question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please. We'll be pulled for questions.

Operator: Thank you, sir. We will now be conducting the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star 2 to remove a question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we poll for questions. And the first question comes from the line of Doug Creutz with TD Cowan, please proceed with your question. Transcription by CastingWords

Speaker Change: We'll now take your questions.

Speaker Change: Operator.

Speaker Change: Thank you, sir. We will now be conducting the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star 2 to remove a question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: One moment please while we poll for questions.

Speaker Change: Take-Two Interactive Software

Doug Cruz: And the first question comes from the line of Doug Cruz with TD Cowan. Please proceed with your question. Hey, thanks.

Speaker Change: Thank you for watching!

Speaker Change: And the first question comes from the line of Doug Creutz with TD Cowan. Please proceed with your question.

Doug Creutz: Hey, thanks. Your largest peer just released the college football game that has done exceptionally well, as I'm sure you've seen. Just curious if that's caused any thoughts about potentially adding a college basketball feature to NBA 2K, whether it's a unit-based item or just another mode in the game. Seems like they're

Doug Cruz: Your largest peer just released a college football game that is done exceptionally well, as I'm sure you've seen. Just curious if that's caused any thoughts about potentially adding a college basketball feature to MBA2K, whether it's a unit-based item or just another mode in the game. It seems like there might be a nice opportunity there. Thanks.

Speaker Change: Hey, thanks. Your largest peer just released a college football game that has done

Doug Creutz: exceptionally well as I'm sure you've seen. Just curious if that's caused any any thoughts about potentially adding a college basketball feature to NBA 2k whether it's a Unit-based item or just another mode in the game. Seems like there might be a nice opportunity there. Thanks

Strauss Zelnick: Thanks for the question, Doug. So, yeah, obviously we did. We have noticed this success with college football. It's just excited to be in the stream. We've taken note of that. We obviously do have a history with college basketball, with college shoes 2K. And we're always listening to our community and their interest to see if there's something that we might be able to do in the future. That's across the board, not necessarily just with how it works, but generally speaking. Nothing to announce now, but obviously it did. We did take notice of it.

Strauss Zelnick: Thanks for the question, Doug. So yeah, obviously, we did notice the success of college football, and it's exciting in the industry. And we should take a note of that. And we obviously do have a history with college basketball, with College Hoops 2K. And we're always listening to our community and their interests to see if there's something that we might be able to do in the future. That's across the board, not necessarily just with college sports but, generally speaking. Nothing to announce now, but obviously,

Speaker Change: Thank you for watching, and I'll see you in the next video.

Speaker Change: Thanks for the question Doug. So yeah, obviously we did. We have noticed the success from Karl Slatoff all and it's exciting.

Speaker Change: in the stream, we take a note of that and we obviously do have a history with college basketball, with College Hoops 2K, and we're always listening to our community and their interest to see if there's something that we might be able to do in the future. That's across the board, not necessarily just with college sports, but generally speaking. Nothing to announce now, but obviously it did, we did take notice of it.

Doug Cruz: Okay, thank you.

Speaker Change: Thank you.

Colin Sebastian: And the next question comes from the line of Colin Sebastian with Baird. Please proceed with your question. Thanks. Good afternoon, everybody. I guess, first off, with at least a year or so to go on development of the next GTA, we're just curious if you could sort of outline perhaps generically at this point in their production cycle of a game at the scale. What parts of development are left to complete? I guess, are you still in the midst of court development? Are you approaching the testing stage? Any sort of color there, I think, would be interesting.

Colin Sebastian: And the next question comes from the line of Colin Sebastian with Baird. Please proceed with your question. Thanks. Good afternoon,

Doug Creutz: Okay, thank you.

Speaker Change: And the next question comes from the line of Colin Sebastian with Beard. Please proceed with your question.

Colin Sebastian: Thanks. Good afternoon, everybody.

Colin Sebastian: I guess first off, with at least a year or so to go on development of the next GTA, I was just curious if you could sort of outline, perhaps generically, at this point in the production cycle of a game at this scale, what parts of development are left to complete? I guess, are you still in the midst of core development? Are you approaching the testing stage? Any sort of color there, I think, would be interesting.

Colin Sebastian: Thanks, good afternoon everybody. I guess first off, with at least a year or so to go on development of the next GTA, which is...

Colin Sebastian: Curious if you can sort of outline, perhaps, generically.

Speaker Change: At this point in the production cycle of a game at this scale, what parts of development are left to complete?

Lainie: Are you still in the midst of core development? Are you approaching the testing stage? Any sort of color there I think would be interesting. And as a follow-up, Lainie, the increase in OPEX guidance for the year, is that more to support with marketing new titles, or was that something related to Gearbox? Any clarification there would be great.

Colin Sebastian: And as a follow-up, Lainie, the increase in OpEx guidance for the year, is that more to support with marketing new titles, or was that something related to Gearbox? Any clarification there would be great. Thank you.

Strauss Zelnick: And as a follow-up, Laney, the increase in OPEX guidance for the years that more to support with marketing new titles or it was that something related to Gearbox. Any clarification there would be great. Thank you. Thanks, Colin. You know, first of all, where we would be in-depth with the title specific, so at the stage of the game it really would vary depending on the title. There's really no cookie-cutter answer to your question, but in any case, it's not the kind of insight that we would give with regard to any specific development. That's going on with the company.

Strauss Zelnick: Thanks, Colin. You know, first of all, where we would be in dev would be title-specific. So at this stage of the game, it would really vary depending on the title. There's really no cookie-cutter answer to your question. But in any case, it's not the kind of insight that we would give with regard to any specific development that is going on at the top.

Speaker Change: Thanks Colin, you know, first of all, we're weary with you.

Speaker Change: The in-dev would be title-specific, so at this stage of the game, it really would vary depending on the title. There's really no cookie-cutter answer to your question, but in any case, it's not the kind of insight that we would give with regard to any specific development.

Lainie Goldstein: In terms of the increase in the FX, it's mostly driven by the acquisition of gearbox and, to a lesser extent, higher marketing personnel and occupancy expenses. Okay, thank you guys.

Strauss Zelnick: In terms of the increase in the OPEX, it's mostly driven by the acquisition of Gearbox and to a lesser extent, higher marketing, personnel and occupancy expense.

Speaker Change: What's going on at the company?

Speaker Change: In terms of the increase in the OPEX, it's mostly driven by the acquisition of Gearbox and to a lesser extent higher marketing, personnel, and occupancy expenses.

Andrew Marok: In the next question comes on the line of Andrew Marok with Raymond James. Please trust me with your question. Thanks for taking my question. Maybe a kind of a corollary to the last question, but with the news of the strikes getting underway, I've seen the reports that it won't affect games in development before September 23. But maybe for some of the earlier stage projects, are you able to adapt your processes to still make headway?

Andrew Marok: And the next question comes from the line of Andrew Marok with Raymond James. Please proceed with your question. Thanks for taking my call.

Speaker Change: In the next question, comes in the line of Andrew Marick with Raymond James. Please proceed with your question.

Andrew Marok: Thanks for taking my question. Maybe kind of a corollary to the last question, but with the news of the strikes getting underway, I've seen the reports that it won't affect games in development before September 23. But maybe for some of the earlier stage projects, how are you able to adapt your processes to still make headway? And is there a point in the dev process where you could hit blockers?

Andrew Marick: Thanks for taking my question. Maybe kind of a corollary to the last question, but with the news of the strikes getting underway, I've seen the reports that it won't affect games in development before September 23.

Speaker Change: But maybe for some of the earlier stage projects, how are you able to adapt your processes to still make headway, and is there a point in the dev process where you could hit blockers?

Strauss Zelnick: And is there a point in the future? So, look, we deeply value our talent relationships, and historically we worked very successfully with all of the unions, including SAG-AFTRA. We continue to work hard to come to a resolution on this current situation. In fact, the common ground on 24 out of 25 proposals, so I'm pretty confident that we can get to a deal that will be mutually beneficial. At the same time, we don't expect any impact whatsoever on our titles that are in development. If the strike went on for a very long time, obviously that would affect us, and that wouldn't be a gross work for the industry.

Strauss Zelnick: And historically, we have worked very successfully with all of the unions, including SAG-AFTRA. We continue to work hard to come to a resolution in this current situation. In fact, Common Ground supported 24 out of 25 proposals. So I'm pretty confident that we can get to a deal that will be mutually beneficial. At the same time, we don't expect any impact whatsoever on our titles that are in development.

Speaker Change: So look, we deeply value our talent relationships and historically we worked very successfully with all of the unions including SAG-AFTRA. We continue to work hard to come to a resolution on this current situation. In fact,

Speaker Change: At the same time, we don't expect any impact whatsoever on our titles that are in development. If a strike went on for a very long time, obviously that would affect us, and that wouldn't be a good thing.

Strauss Zelnick: If a strike went on for a very long time, obviously, that would affect us, and that wouldn't be good for us or for the industry. Okay, great. But we're cautiously optimistic that we'll be able to find common ground, and that's certainly our goal.

Strauss Zelnick: Okay, great. But we're cautiously optimistic, and we'll be able to find common ground, and that's certainly our goal.

Andrew Marick: for the industry. Okay, great. But we're cautiously optimistic. We'll be able to find on and that's certainly, that's certainly our goal.

Strauss Zelnick: That's it, thank you. And then maybe one quick clarification question on the back of that. Is there anything to consider on the expense side related to the strikes, like potential savings from stop labor, or is that just something that probably isn't very material? Thank you. We certainly, we don't get any benefit from the situation.

Andrew Marok: Gotcha. Thank you. And then maybe one quick clarification question on the back of that. Is there anything to consider on the expense side related to the strikes, like potential savings from stopped labor, or is that just something that probably isn't very material?

Speaker Change: Gotcha. Thank you. And then maybe one quick clarification question on the back of that. Is there anything to consider on the expense side related to the strikes, like potential savings from stopped labor, or is that just something that probably isn't very material? Thank you.

Strauss Zelnick: Thank you.

Strauss Zelnick: We certainly don't get any benefit from this situation.

Speaker Change: So we certainly, we don't get any benefit from the situation.

Speaker Change: Take-Two Interactive Software

drew Crum: And the next question comes from the line of Drew Crumb with Stevehull. Please proceed with your question. Okay, thanks, guys. Good afternoon. So I want to go back to Doug's question on college football. It relates to NBA 2K.

drew Crum: And the next question comes from the line of Drew Crum with Please proceed with your questions. Okay, thanks. Hey guys, good afternoon.

Speaker Change: Thank you very much for watching this video.

Speaker Change: And the next question comes in the line of Drew Kramwood's default, please proceed with your question.

drew Crum: Hey guys, good afternoon. I want to go back to Doug's question on college football as it relates to NBA 2K. Curious if you're seeing anything in terms of the leading indicators you track or anticipating any impact on sales from what appears to be now a more crowded sports category. And then Lainie, just on RCS, it looked like it was a tad off your guidance for fiscal 1Q, but you kept the annual outlook on...

Speaker Change: Okay, thank you guys. Good afternoon. So I want to go back to Doug's question on Karl Slatoff ball. It relates to the MBA2K curious if you're seeing

drew Crum: Curious if you're seeing anything in terms of leading indicators you track or anticipating any impact on sales from what appears to be now a more crowded sports category. And then Laney, just on RCS, it looked like it was a tad off your guidance for fiscal 1Q, but you kept the annual outlook unchanged. Can you just reconcile the two? Thanks. Thank you for the question, Drew. In terms of the question on college football, no, we're not expecting. We're not seeing any significant or any impact on our NBA title based on the success of college football. Look, we’re always competing for the customer’s mind share and well across all titles.

Operator: 5 Earnings Call. At this time, all participants are in a listen only mode. A brief 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.

Drew Kramwood: Anything in terms of leading indicators you track or anticipating any impact on sales.

Nicole Shevins: It is now my pleasure to introduce to you Nicole Shevins, SVP of Investor Relations and Corporate Communications. Thank you, Nicole. You may begin.

Strauss Zelnick: Thanks for the question, Drew. In terms of the question about college football, no, we're not expecting, we're not seeing any significant or any impact on our NBA title based on the success of college football, competing for the customer's mindshare and well across all titles. So I don't necessarily think it's necessarily sportish for us. I know we're not

Speaker Change: Thank you very much for watching this video, and I hope you enjoyed this video.

Nicole Shevins: Good afternoon. Thank you for joining our conference call. We will discuss our results for the first quarter of fiscal year 2025 and the June 30, 2024. Today's call will be led by Strauss Zelnick, Take-Two's Chairman and Chief Executive Officer, Karl Slatoff, our President, and Lainie Goldstein, our Chief Financial Officer. We will be available to answer your questions during the Q&A session following our prepared remarks.

Speaker Change: Thanks for the question, Drew. In terms of the question about college football, no, we're not expecting, we're not seeing any significant or any impact on our NBA title based on the success of college football. You know, look, we're, we always, we're always...

Strauss Zelnick: So I don't necessarily think it's necessarily a sport to show us, but no, we're not expecting any effect on NBA 2K 5.

Drew Kramwood: competing for the customer's mindshare and welfare across all titles, so I don't necessarily think it's a necessarily a sports issue for us, but no, we're not anticipating any effect on NBA.

Nicole Shevins: 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 an information currently available to us. We have no obligations 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 10K, and quarterly report on form 10Q, including the risks summarized in the section entitled risk factors.

Lainie Goldstein: And for the RCS whole year, it's being driven by Match Factory and June Blast, so that's why we're able to keep this whole year. Which is good news.

Strauss Zelnick: for the RCS all year. It's being driven by Match Factory and Zoom Blast, so that's why we're able to keep it.

Drew Kramwood: Page 2 of 8

Speaker Change: And for the RCS all year, it's being driven by match factory and June Blast, so that's why we're able to keep the full year. Which is good news. Yeah, it's going to be into doing fantastic.

Strauss Zelnick: Which is good news, yeah, clear, yeah, those games are doing fantastic.

drew Crum: Yeah, I'm going to introduce you guys. Thanks, guys.

drew Crum: Got it. Okay. Thanks, guys.

Benjamin Soff: And the next question comes from a line of Benjamin Soff with Deutsche Bank. Please proceed with your question. Hey guys, thanks for the question.

Benjamin Soff: And the next question comes from the line of Benjamin Soff with Deutsche Bank. Please proceed with your question.

Speaker Change: Okay, thanks guys.

Speaker Change: And the next question comes from the line of Benjamin Soff with Deutsche Bank. Please proceed with your question.

Benjamin Soff: Hey guys, thanks for the question. I wanted to ask a little bit about Star Wars Hunters, and it seems like the first game of that type that you guys have released since acquiring Zynga. And so does this provide a blueprint to bring more AAA content to mobile? I'm just kind of curious to get your thoughts there. Thank you.

Strauss Zelnick: I wanted to ask a little bit about Star Wars Hunters, and it seems like the first game of that type that you guys have released since acquiring Zynga, and so this provides a blueprint to bring more AAA content to mobile and just kind of curious to hear your thoughts there. Thank you. So we're very happy with the Star Wars Hunters. It was a really ambitious title. I think the team at Natural Motion has done a great job, and I think the Zynga label actually has been really excited to launch this cost platform title based on beloved IP.

Benjamin Soff: Hey guys, thanks for the question. I wanted to ask a little bit about Star Wars Hunters and it seems like the first game of that type that you guys have released since acquiring Zynga, and so does this provide a blueprint to bring more AAA content to mobile? I'm just kind of curious to get your thoughts there. Thank you.

Nicole Shevins: I'd also like to note that unless otherwise stated, all numbers we will be discussing today are gaps 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 gap financial results in order to evaluate our operating performance. Our press release also contains the reconciliation of any non-gap financial measure to the most comparable gap 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 Navy have seen from our website at TakeTwoGames.com.

Strauss Zelnick: But we're very happy with For Star Wars Hunters, it was a really ambitious title. I think the team at Natural Motion has done a great job, and I think the Zynga label was actually really excited to launch this cross-platform title based on beloved IP. I mean, it's early yet to see how it will perform, so the jury is out, but it's off to a really good start. And I do think this successful development does potentially inform other titles, but each title stands alone. And as you know, it is our preference to focus on intellectual properties that we own.

Speaker Change: But we're very happy with the...

Speaker Change: For Star Wars Hunters, it was a really ambitious title, I think the team at Natural Motion has done a great job, and I think the single label actually has been really excited to launch this concept form title.

Strauss Zelnick: And it's early yet to see how it will perform. So the jury is out, but it's off to a really good start. And I do think this successful development does potentially inform other titles, but each title stands alone.

Speaker Change: Based on Beloved IP. It's early yet to see how it will perform, so the jury is out, but it's off to a really good start. And I do think that this successful development does potentially inform other titles, but each title stands alone. And as you know,

Nicole Shevins: And now, I'll turn the call over to Strauss. Thanks, Nicole.

Strauss Zelnick: Good afternoon, and thank you for joining us today. I'm pleased to report that fiscal year 2025 is off to a solid start. Our first quarter netbookings of $1.2 billion were in line with our expectations and our management team remains highly confident in our path forward. We're reiterating our netbookings outlook for the year. As we release our groundbreaking pipeline, we expect to achieve tremendous growth, including sequential increases in netbookings in fiscal 2026 and 2027.

Strauss Zelnick: And, as you know, it is our preference to focus on intellectual properties that we own.

Speaker Change: It is our preference to focus on intellectual properties that we own.

Lainie Goldstein: And then in the quick follow-up, it looks like the outlook for NBA RCS change a little bit. Just curious if you could drill down into the moving pieces there. Thank you. So we had a slight mission Q1. That was driven by few active users and enters this year, which is driven by lower sales of units due to the Gen 8 unit. But when we look at the full year, we expect it overall. And a lot of that is driven by NBA 2K 24. We still have the same expectations that we did for NBA 2K 25 if we did at the beginning of the year.

Benjamin Soff: And then, as a quick follow-up, it looks like the outlook for MBA RCS has changed a little bit. Just curious if you could drill down into the moving pieces there. Thank you.

Speaker Change: And then as a quick follow-up, it looks like the outlook for MBA RCS changed a little bit. Just curious if you could drill down into the moving pieces there. Thank you.

Strauss Zelnick: So we had a slight miss in Q1. That was driven by a few active users and vendors this year, which is driven by lower sales of unit due to the Gen 8 unit. But when we look at the full year, we, you know, we expect it overall. And a lot of that is driven by MBA 2K24. We still have the same expectations that we did for MBA 2K25 as we did at the beginning of the year.

Strauss Zelnick: I'd like to thank our talented teams across our labels for their boundless passion, hard work, and dedication through our mission. Now, it's turning to our business highlights from the quarter. The Grand Theft Auto Series exceeded our expectations, as momentum continues to build ahead of the launch of Grand Theft Auto 6 and fall 2025. Unit sales for Grand Theft Auto 5 continued growth, and to date the title is sold in over 200 million units.

Speaker Change: So we had a slight miss in Q1.

Speaker Change: That was driven by a few active users and vendors this year, which is driven by lower sales of units due to the Gen 8 unit. But when we look at the full year, we expect it overall to be...

Speaker Change: And a lot of that is driven by MBA 2K24.

Speaker Change: We still have the same expectations that we did for MBA 2K25 as we did at the beginning of the year.

Benjamin Soff: Okay, that's helpful. Thanks, guys.

Benjamin Soff: Okay, that's helpful. Thanks, guys.

Strauss Zelnick: Grand Theft Auto Online also surpassed our projections, led by its summer content pack, bottom-dollar bounties, which launched to 2025. The audience for Rockstar's premium membership service, GTA Plus, grew strong double digits over last year, with Rockstar Games offering its members an array of valuable benefits that range from enhancing the in-game experience to providing access to their classic titles, including the recent addition of Illinois. We're pleased with the performance of Red Dead Redemption 2 which has sold in more than 65 million units to date.

Speaker Change: Okay, that's helpful. Thanks, guys.

Martin Yang: And the next question comes in the line of Martin Yang with Oppenheimer & Company. Please proceed with your question. Thanks for taking my question. First question regarding your overall view.

Martin Yang: And the next question comes from the line of Martin Yang with Oppenheimer and Company. Please proceed with your question.

Speaker Change: And the next question comes in the line of Martin Yang with Oppenheimer and Company. Please proceed with your question.

Martin Yang: Hi, thanks for taking my question. First question regarding your overall view, can you give us an updated view on your approach to UGC across different franchises? And how are you open to maybe modding both on PC and console in the future?

Martin Yang: Hi, thanks for taking my question. First question regarding your overall view, can you give us

Strauss Zelnick: Can you give us an updated view on your approach to UGC across different franchises and how are you open to maybe modding both on PC and console for your future games? We've been very open-minded, and we certainly are very excited about many things that our users are delivering in their engagement with our titles and other people's titles. Obviously, you know, we're excited about what we see in the modding community for GTA, and we think that's pretty exciting. At the end of the day, you know, entertainment companies need to bring great entertainment to consumers. That is a starting point.

Speaker Change: After the video on your approach to UGC

Speaker Change: across different franchises, and how are you open to...

Strauss Zelnick: In addition, Red Dead Online continued to engage its audience during the period with new monthly bonuses and free outfits inspired by top content creators within the Red Dead community. NBA 2K24 delivered a solid quarter and today has sold in close to 11 million units. Engagement remains strong with users playing more than frequently and participating in more games compared to NBA 2K23 for the same period last year. The franchise continues to expand its audience through several innovative mobile experiences, including NBA 2K24 My Team, a free-to-play card collecting experience that has been downloaded nearly 3 million times since the launch in February.

Strauss Zelnick: We've been very open minded. And, you know, we, we certainly are very excited about many things that our users are Delivering in their engagement with our titles and other people's titles, obviously, you know, we're excited about what we see in the modding community for PTA, and we think, Unknown Speaker At the end of the day, entertainment companies need to bring great entertainment to consumers, that is the starting point. And I'm not a believer that the industry will of any sort, Hunter. And if consumers want to add to that and enhance that for for their own use, generally speaking, we would like to enable that behavior, generally speaking.

Speaker Change: We've been very open-minded and we certainly are very excited about many things that our users are.

Speaker Change: delivering in their engagement with our titles and other people's titles. Obviously, you know, we're excited about what we see in the modding community.

Martin Yang: for PTA, and we think that's pretty exciting. At the end of the day, entertainment companies need to bring great entertainment to consumers. That is the starting point. And I'm not a believer that the industry will.

Strauss Zelnick: And I'm not a believer that the industry will turn into a UGC-driven industry. However, for certain titles, for example, Roblox, you know, they are really more platforms than they are in digital entertainment titles. of any sort, and if consumers want to add to that and enhance that for their own use, generally speaking, we would like to enable that behavior; generally speaking, protective of our intellectual property or protective of other people's intellectual properties. But we do think that can be a positive addition to the industry.

Martin Yang: into a UGC-driven industry. However, for certain titles, for example, Roblox. You know, they are really more platforms than they are in digital entertainment titles. And I think that this is what we try ourselves on making the best entertainment.

Strauss Zelnick: Moreover, NBA 2K24 Arcade Edition continues to enjoy huge success on Apple Arcade and is consistently a top two game on the service. WWE 2K24 which launched at the end of fiscal 2024s continued to grow its audience and enhance its profitability. Our teams have driven meaningful engagement through the release of several content packs with more on the way. Today, players have logged 27 million hours of gameplay across more than 200 million matches featuring a series high roster of over 300 past and present superstars.

Martin Yang: of any sort on Earth.

Martin Yang: And if consumers want to add to that and enhance that for their own use, generally speaking, we would like to enable that behavior, generally speaking.

Strauss Zelnick: ...

Martin Yang: Protective of our intellectual property, we're protective of other people's intellectual properties. But we do think that that can be a positive addition to the industry. I don't think it will define either our company or the industry, however.

Unknown Attendee: I don't think it will define either our company or the industry, however. Thank you.

Strauss Zelnick: On April 4, 2K and Cat Daddy Games released NFL 2K Playmakers, a new free-to-play mobile title that allows fans to collect NFL player cards and assemble an exciting roster of offensive, defensive and special teams. We're proud to add NFL 2K Playmakers to our ever-expanding mobile portfolio in partnership with the NFL and the NFL Players Association. On April 26, 2K and Hanger 13 launched Topspin 2K25, marking the return of our popular tennis franchise after a 13-year hiatus.

Martin Yang: Another question from Lainie: Can you maybe clarify if GTA and NBA 2K24 both franchises grew bookings on a year-over-year basis in the first?

Lainie Goldstein: Another question from Lainie. Can it be clarified if GTA and in the 2K-24, they both franchise role bookings on a year of your basis in the first quarter? So for the quarter for GTA and we saw some the title declined for net bookings in RCS. I'm sorry, what was the second title that you asked about? 2K-24, comparison.

Speaker Change: Thank you. I'm not a question from Lainie. Can you be clarify if GTA and AB2K point four, the both franchise role bookings on a younger basis in the first quarter?

Lainie Goldstein: So for the quarter, for GTA, we saw some, the title declined for net bookings in RCS. I'm sorry, what was the second title that you asked about? 2K24 compared to 2K23. Well, I don't have a 24 verse 23, but in general, MBA 2K declined in the quarter.

Speaker Change: So, for the quarter, for GCA, we saw some, the title declined, for net bookings in RCS, I'm sorry. What was the second title at the US Cup? 2K24, I'm very sorry.

Strauss Zelnick: The title was well received by critics and fans alike who praised its authentic tennis experience, deep personalization and legendary venues, 2K sporting topspin with a series of center court passes that feature iconic courts, brands and tournaments.

Speaker Change: Well, I don't have a 24 verse 23, but in general, MBA 2K declined in the quarter.

Mike Hickey: And the next question comes in the line of Mike Hickey with The Benchmark Company. Please proceed with your question. Hey, Strauss Karl. Lainie, Nicole, great question. Just to Strauss, obviously a lot of debate on our economic future here, near term, always curious, European, but I guess more importantly just how you're thinking about maybe sort of a darkening macroeconomic picture impact on your business. You already sort of weathered one storm on mobile by service, and you feel like you're more resilient. If you go into a more challenging environment again. And then number two, it looks like trends in current gen hardware sales have slowed.

Mike Hickey: And the next question comes from the line of Mike Hickey with The Benchmark Company. Please proceed with your question. Hey, Strauss, Karl, Lainie, Nicole, great quarrel, guys. Thanks for taking our questions.

Speaker Change: Thank you. That's it for me.

Strauss Zelnick: During the period, we added to the caliber of our world-class development teams with our acquisition of Gearbox Entertainment. We're thrilled to welcome Randy Pitchford and his studio to the Take 2 and 2K family. We've identified many potential growth opportunities for the Borderlands series and Gearbox's catalogue. In addition, tomorrow marks the box office of view of the star-studded Borderlands feature film from Lionsgate, and we hope that audiences will enjoy experiencing the series vibrant and character driven world on the big screen.

Speaker Change: And the next question comes from the line of Mike Hickey with The Benchmark Company. Please proceed with your question.

Mike Hickey: and Nicole Goodcore, guys. Thanks for your time.

Mike Hickey: Hey Strauss, Karl, Lainie, Nicole, great core guys, thanks for taking our questions just to Strauss obviously. A lot of debate on our economic future here near term, always curious, your opinion, but I guess more importantly, just how you're thinking about maybe sort of a darkening macroeconomic picture on impact on your, your business, you already sort of weathered one storm on a mobile live service, do you feel like you're more resilient? If you go into a more challenging environment again?

Mike Hickey: taking our questions. Just two, Strauss, obviously a lot of debate on our economic future here near term, always curious.

Mike Hickey: You're opinion, but I guess more importantly, just how you're thinking about maybe sort of a darkening macroeconomic picture impact on your business. You already sort of weathered one storm on a mobile life service. Do you feel like you're more resilient?

Strauss Zelnick: Zingga delivered another solid quarter, including phenomenal performance at peak. Matt Factory is scaling quickly and is established itself as one of Zingga's largest contributors to net bookings. The title is responding well to our investment in user acquisition. Reflected in net bookings growth of more than 50% over last quarter, we believe that there are even more growth opportunities ahead as we add new features and up, updates. Dunblass delivered strong Euro-era growth for the third consecutive quarter.

Mike Hickey: And then, number two, it looks like trends in current gen hardware sales have slowed, and prior gen is feeling pretty sticky here. Some of that maybe is the macro, some of it's maybe just we haven't seen the price release Strauss that we normally do at this point in the cycle. And other pieces may be, you know, services like GT Online still being very strong on prior gen. So just curious about your view on sort of where we are in the cycle and what implications it may have for your business. Obviously, it's impacted NDA, but thinking about maybe new software that is more current-gen versus prior-gen, what sort of challenges and opportunities you might have in that situation.

Speaker Change: if we go into a more challenging environment again.

Speaker Change: And then number two, it looks like trends in current-gen hardware sales have slowed.

Strauss Zelnick: And prior Jan is feeling pretty sticky here. Some of that maybe is the macro. Some of it's maybe just haven't seen the price release Strauss that we normally do this point in the cycle. And other pieces maybe, you know, services like GTM. I'm still being very strong on Paragen. So just curious, your view. I'm sort of where we are in the cycle. And what implications it may have for your business, obviously it's impacted in the air, but thinking about maybe new software that is more current gen versus prior gen, what sort of challenges opportunities you might have from that situation.

Speaker Change: And PriorGen is feeling pretty sticky here. Some of that maybe is the macro. Some of it's maybe just haven't seen the price release, Strauss, that we normally do at this point in the cycle. And other pieces may be, you know, services like GTO9 still being very strong on PriorGen. So just curious, your view.

Strauss Zelnick: As the title celebrates its seventh anniversary this month, we're pleased that this has become a top-time grossing game in the US app lab store this quarter, and has achieved more than $2.5 billion in lifetime gross bookings.

Speaker Change: I'm sort of where we are in the cycle and what implications you may have for your business obviously it's impacted in the A, but thinking about maybe a new software that is more current gender, higher gender and what sort of challenges opportunities you might have from that situation.

Strauss Zelnick: On June 4, Zinget and Lucasfilm Games launched Star Wars Hunters. The label's first ever-across platform title, which is available for free on Nintendo Switch, NIOS, and Android devices. Expanding the iconic Star Wars universe with new locations and characters, the competitive battle arena game received a tremendous amount of fanfare from the media and audiences around the globe. Players can look forward to additional content offerings coming soon. Our blended monetization efforts in hyper-tasual or progressing well-erolic, which costs $3.6 billion all-time downloads.

Mike Hickey: Thanks, guys.

Strauss Zelnick: Thanks, guys. As drawdowns go, it was not a terrible drawdown. The unemployment rate at 4.2 or 4.4 is still very low unemployment. The unemployment at 114,000 jobs are so added in the period, which is solid. As you know, people have left the workforce. So I'm not particularly worried from one report that we're heading into some kind of consumer recession. I don't see it now. I'm also not in the business of predicting that sort of thing, but the metrics don't support that. Generally speaking, the entertainment business is pretty resilient in such a situation. Of course, the business is not counter-cyclical and, you know, in some massive downturn, we of course would be negatively affected, but I just don't see that on the horizon.

Speaker Change: Lainie Goldstein, Lainie Goldstein, Lainie Goldstein,

Speaker Change: Thank you very much for watching this video and I'll see you in the next video.

Strauss Zelnick: Transcripts provided by Transcription Outsourcing, LLC. Unemployment is still a terrible drawdown. The unemployment rate at 4.2 or 4.4 is still very low. Unemployment, 114,000 jobs or so were added in the period, which is solid. As you know, people have left the workforce. So I'm not particularly worried from, you know, one report that we're heading into some kind of consumer recession. I don't see it.

Speaker Change: Thank you for watching, and I'll see you in the next video.

Speaker Change: As drawdowns go, it was not.

Speaker Change: A terrible drawdown. The unemployment rate at 4.2 or 4.4 is still very low. Unemployment, 114,000 jobs or so were added in the period, which is solid. As you know, people have left the workforce.

Strauss Zelnick: Fan-favorite titles Screw Jam and Twisted Tangle both performed well-disquartered, becoming top 50 and top 100 grossing games respectively in the US app lab store. Our direct-to-consumer business continues to grow, and our teams are working actively to add more titles each quarter to this highly creative, owned distribution channel.

Speaker Change: So I'm not particularly worried from, you know, one reports.

Strauss Zelnick: Now, I'm also not in the business of predicting that sort of thing, but the metrics don't support that. Generally speaking, the entertainment business is pretty resilient in such a situation. Of course, the business is not counter-cyclical and, you know, in some.., massive downturn. We of course would be negatively affected, but I just don't see that on the horizon.

Speaker Change: that we're heading into some kind of consumer recession. I don't see it. Now, I'm also not in the business of predicting that sort of thing, but the metrics don't support that.

Strauss Zelnick: Looking ahead, Zinget has numerous titles in development and top launch, including the latest installment in their popular racing franchise, CSR Racing 3.

Speaker Change: Generally speaking, the entertainment business is pretty resilient in such a situation. Of course, the business is not counter-cyclical and, you know, in some...

Strauss Zelnick: In closing, I believe that there are talented creative teams and own portfolio of iconic entertainment franchises are driving both the consistent performance of our company and our potential to achieve unprecedented levels of multi-year growth as we focus on our strategic priorities in embody our core tenets of creativity, innovation, efficiency. I'm confident that we'll set new benchmarks for our industry and deliver strong returns for our shareholders.

Speaker Change: Massive downturn. We of course would be negatively affected, but I just don't see that on the horizon.

Strauss Zelnick: So not a current concern for us, and we're awfully well positioned. As you know, our industry is back in growth mode, consult businesses and for software that is up low single digits, mobiles up mid single digits. So there are tailwinds, and our mobile business is really performing with all these new great titles, which we reference today. And we're really excited about our consult pipeline as well, which we think will continue to perform. You know, obviously, we're announcing a quarter where we're right on track. We've very consistent results that are squarely within or better than guidance and consensus.

Strauss Zelnick: So not a current concern for us, and we're awfully well-positioned. As you know, our industry is back in growth mode, console businesses for software, that is, is up low single digits, mobile's up mid single digits. So there are tailwinds, and our mobile business is really performing with all these new great titles, which we referenced today. And we're really excited about our console pipeline as well, which we think will continue to perform.

Speaker Change: So, not a current concern for us, and we're awfully well-positioned. As you know, our industry is back in growth mode. Consoles, businesses, and...

Speaker Change: for software that is up low single digits, mobiles up mid single digits.

Speaker Change: So there are tailwinds, and our mobile business is really performing with all these new great titles.

Karl Slatoff: I'll now turn the call over to Carl. Thanks, Strauss. I'd like to thank our teams for continuing to deliver immersive and engaging entertainment experiences that are strengthening the foundation for our long-term success.

Speaker Change: which we referenced today, and we're really excited about our console pipeline as well, which we think will continue to perform.

Strauss Zelnick: You know, obviously, we're announcing a quarter where we're right on track with very consistent results that are squarely within or better than guidance and consensus. We've reiterated our guidance for the year, and we've said that we expect tremendous growth in fiscal 26 and 27. So we're about as optimistic as we can be without overstating the case, something that we try really hard not to do. Specifically, with regard to hardware, I saw the same stats that you did, and it looks like if you just measure four years in, last time, this time, it seems like there's a bit of a slowing. And the report I saw said, well, we're the professional devices and the like. But everything always changes.

Speaker Change: You know, obviously, we're announcing a quarter where we're right on track with very consistent results.

Karl Slatoff: Starting to our recent releases and announced offerings for the current year. On July 25, Zinget launched a new puzzle RPG title, Game of Thrones Legends, which invites players to journey through the magical land of Westeros featuring characters, lowers, and storylines from HBO's popular Game of Thrones and House of the Dragon franchises. The game marked the exciting return of Emmy and Golden Globe nominated actor Kit Harrington to the franchise, who also starred in a marketing campaign set in the title's immersive world. Player reception has been positive with the title entering the top ten in the overall free games category on the U.S. Apple App Store and on Google Play in the U.S.

Speaker Change: that are squarely within or better than guidance and consensus.

Strauss Zelnick: We've reiterated our guidance for the year, and we've said that we expect tremendous growth in fiscal 26 and 27. So we're about as optimistic as we can be without overstating the case, something that we try really hard not to do specifically with regards to hardware. I saw the same stats that you did. And it looks like if you just measure, you know, four years in, last time this time seems to be like there's a bit of slowing. And you know, the report I saw said, well, we're, you know, we're the pro devices and the like, but everything always changes.

Speaker Change: We've reiterated our guidance for the year and we've said that we expect tremendous growth.

Speaker Change: In fiscal 26 and 27. So we're about as optimistic as we can be without overstating the case, something that we try really hard not to do.

Speaker Change: specifically with regard to hardware. I saw the same stats that you did and it looks like if you just measure, you know, four years in, last time, this time seems to be like there's a bit of slowing.

Speaker Change: And the report I saw said, well, we're the pro devices and the like. But everything always changes. Four years ago, PC wasn't anywhere near as meaningful as it is today for console-type releases. That's a big growth market.

Strauss Zelnick: You know, four years ago, the PC wasn't anywhere near as meaningful as it is today for console-type releases. You know, that's a big growth market. And no, I don't think what consumers are saying is that they're good with Gen 8 and don't care about Gen 9. We saw the exact opposite with regard to NBA 2K, where Gen 8 was actually not a high performer and performed worse than we expected. Gen 9 has been incredibly powerful, so I think the Gen 9 platforms will continue to perform. I think you'll continue to see meaningful growth in that installed base, and I wouldn't put too much weight on a particular period of time.

Strauss Zelnick: You know, four years ago, KC wasn't anywhere near as meaningful as it is today for console-type releases. You know, that's a big growth market. And no, I don't think what consumers are saying is they're good with Jenny and don't care about Gen 9. And we saw the exact contrary with regard to NBA 2K, where Gen 8 actually was not a high performer and performed worse than we expected. Gen 9 has been incredibly powerful. So I think the Gen 9 platforms will continue to perform. I think you'll continue to see meaningful growth in that installed base.

Karl Slatoff: Two came visual concepts. Well, once again set new standards of excellence and realism for basketball or in our industry with a launch of NBA 2K25. The title officially launches on September 6th and we are excited to offer fans that have pre-ordered the game the ability to play up to two days early. Players will be able to forge a dynasty in my career and compete in the new My Team modes. Those on Gen 9 platforms will experience an added sixth era in my NBA, a more dense and interactive city, and the chance to cement their goat status in the W. We are thrilled that Visual Concepts will release the Gen 9 version of NBA 2K25 for PC, which will provide our passionate community access to our series most advanced gameplay and stunning graphics.

Speaker Change: And no, I don't think what consumers are saying is they're good with gen 8 and don't care about gen 9. We saw these that contrary with regard to MBA2K.

Speaker Change: where Gen 8 actually was not a high performer and performed worse than we expected Gen 9 has been incredibly powerful.

Speaker Change: So I think the Gen9 platforms will continue to perform. I think you'll continue to see meaningful growth in that installed base, and I wouldn't put too much weight on a particular period of time.

Strauss Zelnick: And I wouldn't put too much weight on a particular period of time. I was asked earlier today by someone, you know, what's next on the hardware side? And we're not in the hardware business, and I wouldn't even know how to answer that question. But what's next on the entertainment side and the software side is we've got a bunch of great titles in market, great live services, and great new titles coming. We have the best pipeline we've ever had, and it's close to coming to fruition. You know, we feel really great about that.

Strauss Zelnick: I was asked earlier today by someone, you know, what's next on the hardware side, and my answer is, you know, we're not in the hardware business, and I wouldn't even know how to answer that question, but what's next on the entertainment side, on the software side, is we've got a bunch of great titles in market, great live services, and great new titles coming. We have the best pipeline we've ever had, and it's close to coming to fruition. You know, we feel really great about that.

Speaker Change: I was asked earlier today by someone, you know, what's next on the hardware side, and my answer is, you know, we're not in the hardware business, and I wouldn't even know how to answer that question.

Speaker Change: But what's next on the entertainment side and the software side is we've got a bunch of great titles in market, great live services and great news titles coming. We're the best pipeline we've ever had and it's close to coming to fruition. You know, we feel really great about that.

Mike Hickey: Thanks, Strauss. Good luck, guys.

Unknown Attendee: Thanks, Dras.

Unknown Attendee: Good luck.

Omar Dessouky: And the next question comes to the line of Omar Dessouky with Bank of America. Please proceed with your question. Thanks for taking my question.

Omar Dessouky: When the next question comes from the line of Omar Dessouky with Bank of America, please proceed with your question. Hey, thanks a lot for that...

Speaker Change: Thanks, Strauss. Good luck, Strauss.

Speaker Change: And the next question comes from the line of Omar Dessouky with Bank of America.

Omar Dessouky: Strauss, I wanted to ask you... How big is the opportunity for a second soccer simulation game in the market? whether you would comment on any rumors about 2K acquiring the FIFA license and what your philosophy is on. Developing Sports Games, how long you might take and what your strength might be in that regard.

Speaker Change: and proceed with your question.

Strauss Zelnick: Strauss, I wanted to ask you, you know, how big is the opportunity for a second soccer simulation game in the market? Whether you would comment on any rumors about 2K acquiring the 4K FIFA license and what your philosophy is on developing sports games, how long you might take, and what your strengths might be in that regard. Yeah, there's a lot there. Look, we're in the soccer business. We have the number one mobile soccer manager title in Top 11. We're really happy that we do. And we're also very mindful that it's incredibly difficult to build a great sim experience for console. It takes a long time, and that if you do it right, you know, your users are very loyal and very embedded.

Omar Dessouky: Hey, thanks a lot for taking my question. Strauss, I wanted to ask you...

Omar Dessouky: You know, how big is the opportunity for a second soccer simulation game in the market?

Speaker Change: Whether you would comment on any rumors about 2K acquiring the FIFA license.

Karl Slatoff: We can't wait for Sid fans around the world to enjoy what promises to be the best title in the series 30-year history. We also successfully launched a mobile civilization game in China through our partnership with Tencent, and are pleased that the title hit number 1 on iOS and Android stores at launch.

Speaker Change: and what your philosophy is on...

Omar Dessouky: Developing sports games, how long you might take and what your strengths might be in that regard.

Strauss Zelnick: Yeah, there's a lot there. Look, we're in the soccer business. We have the number one mobile soccer manager title in the top 11. We're really happy that we do. And we're also very mindful that it's incredibly difficult to build a great sim experience for console. It takes a long time.

Speaker Change: Yeah, there's a lot there.

Karl Slatoff: In closing, as we continue to execute upon our strategy, we believe that there are many opportunities that will enable us to deliver a period of significant margin expansion, long-term growth and shareholder returns for take 2.

Speaker Change: Look, we're in the soccer business. We have the number one mobile soccer manager title in top 11. We're really happy that we do. And we're also very mindful that it's incredibly difficult to build a great sim experience for console. It takes a long time.

Strauss Zelnick: And that if you do it right, you know, your users are very loyal and very embedded. I would just note with regards to the FIFA license that it does not bring along with it rights. It doesn't come with players, teams, or leagues.

Lainie Goldstein: Now turn the call over and landing. Thanks Carl and good afternoon everyone. We achieved solid first quarter results by engaging our players with exciting new game releases and content updates while maintaining our focus on efficiency. We continue to have great confidence in our ability to deliver a multi-year period of growth. Our core franchise has remained healthy, our teams are hard at work on the most ambitious development pipeline in our company's history, and we remain focused on new growth opportunities to enhance our business model and financial profile.

Speaker Change: and that if you do it right, your users are very loyal and very embedded.

Strauss Zelnick: I would just know with regards to the FIFA license that it does not bring along with it rights doesn't come with players, teams, or leagues. So it's not as simple, for example, as negotiating with the NFL or the NBA or MLB, where, you know, at most you often negotiate with a league and a players association. So for anyone who would want to compete in a straight ahead sim environment for soccer, you know, you wouldn't just have to address one particular brand license. If there's a whole lot more than that. And I think from our point of view, we have a great sports portfolio led by NBA 2K.

Speaker Change: I would just note with regard to the FIFA license that it does not bring along with it rights. It doesn't come with players, teams, or leagues. So it's not as simple, for example, as negotiating with the NFL or the NBA.

Strauss Zelnick: So it's not as simple, for example, as negotiating with the NFL or the NBA or MLB, where, you know, at most you have to negotiate with a league and a players' association. So, for anyone who would want to compete in a straight-ahead sim environment for soccer, you wouldn't just have to address one particular brand license. There's a whole lot more than that.

Speaker Change: or MLB, where, you know, at most, you often negotiate with a league and a players' association.

Lainie Goldstein: I'd like to thank our teams for enabling us to captivate millions of players every day and for their unwavering support for our long-term vision. Turning to our results, we delivered first quarter net bookings of $1.22 billion, which was in line with our guidance range of $1.2 to $1.25 billion. Recurring consumer spending was flat for the period and accounted for 83% of net bookings. Mobile increased mid-single digits driven by the addition of match factor rate and growth and June last, which was partially upset by declines in our hyper casual mobile portfolio and empires and puzzles.

Speaker Change: So, for anyone who would want to compete in a straight-ahead SIEM environment for soccer,

Speaker Change: You know, you wouldn't just have to address one particular brand license.

Strauss Zelnick: And from our point of view, we have a great sports portfolio led by NBA 2K. We have WWE 2K, which is growing and profitable and really robust. We have a superb partner in TKO, a great partner in the NBA with the NBA and the NBA Players Association, great partners in the NFL with the NFL Players Association, we're in the tennis business, we're in the golf business, and the list goes on. I'm sure we will make more announcements in due course.

Speaker Change: If there's a whole lot more than that.

Speaker Change: And I think from our point of view, we have a great sports portfolio led by NBA 2K. We have WWE 2K, which is growing and profitable, really robust. We superb partner in GTA, great partner at the NBA with...

Strauss Zelnick: We have WWE 2K, which is growing and profitable, really robust. We superb partner in TKO great partner at the NBA with the NBA and the NBA Players Association with great partners, the NFL and the NFL Players Association were in the tennis business. We're in the golf business.

Speaker Change: The NBA and the NBA Players Association, we're great partners, the NFL and the NFL Players Association, we're in the tennis business, we're in the golf business, so and the list goes on, you know, I'm sure we will make more announcements in due course.

Lainie Goldstein: Grand Theft Auto Online and MBA2K were both down. During the quarter, we launched Popspin 2K25, no rest for the wicked on early access for PC, NFL 2K Playmakers, and Star Wars Hunters. GapNet revenue increased 4% to $1.34 billion while cost of revenue declined 6% to $567 million and operating expenses increased by 8% to $956 million. On a management basis, operating expenses rose 12% year over year, which was better than our forecast due to lower R&D and marketing costs.

Unknown Attendee: So when the list goes on, you know, I'm sure we will make more announcements in due course. Thank you very much.

Clay Griffin: And the next question comes from a line of Clay Griffin with Moffit, Nathanson. Please proceed with your question. Hi, good evening. Thank you. Curious on this, the year of year change and advertising that, rather than I suspect that's something to do with the reorientation of the hyper casual business. But maybe, maybe just talk about what you think advertising can do for your more core portfolio of mobile titles, like what you have in Peak. And would you prefer to see kind of, you know, I guess, external sources of demand and advertising there. Where do you think the bigger opportunity is to continue pushing to direct the consumer and really just, you know, investing in more of the an app side.

Clay Griffin: And the next question comes from the line of Clay Griffin with Moffett Nathanson. Please proceed with your question.

Speaker Change: Thank you very much.

Speaker Change: And the next question comes from the line of Clay Griffin with Moffett Nathanson. Please proceed with your question.

Clay Griffin: Hi, good evening. Thank you.

Clay Griffin: Hi, good evening. Thank you. I'm curious on the year-over-year change in advertising net revenue. I suspect that's

Clay Griffin: I am curious about the year-over-year change in advertising net revenue. I suspect that has something to do with the reorientation of the hyper-casual business. But Strauss, maybe just talk about what you think advertising can do for your more core portfolio of mobile titles, like what you have in Peak. And would you prefer to see kind of, you know, external sources of demand in advertising there? Or do you think the bigger opportunity is this continued push into direct-to-consumer and really just investing in more of the in-app side?

Speaker Change: has something to do with the reorientation of the hyper-casual business.

Speaker Change: But Strauss, maybe just talk about what you think advertising can do for your more core portfolio of mobile titles, like what you have in Peak.

Lainie Goldstein: Turning to our guidance, I'll begin with our full fiscal year X, and Expectations. Our business is performing well, and as Strauss mentioned, we are reiterating our net bookings Outlook range of $5.55 to $5.65 billion, which represents 5% growth over fiscal 2024. The largest contributors to net bookings are expected to be NBA 2K, the Grand Theft Auto Series, Tune Blast, or Hypo-Casual Mobile Portfolio, Match Factory, Empires and Puzzles, the Red Dead Redemption Series, Sinmire Civilization 7, and Words With Friends.

Speaker Change: Would you prefer to see, you know, I guess, an external source of demand advertising there, where do you think the bigger opportunity is the skittin you push into?

Strauss Zelnick: It's really very titled by title. There are certain titles that really aren't built for much advertising. They're really more meant for an app purchases. There are titles that can be both. And then there are titles that really have to be ad-driven. We have all of those. And we want to make sure that we do offer appropriate ad units where they do make sense. And that has been a very significant area of growth for Zenga since the acquisition. And I think that will continue. Well, we want to make sure is that we monetize all of the engagement.

Strauss Zelnick: It really varies title by title. There are certain titles that really are. Historically, the mobile business has been one where you monetize a very small part of the engagement, and we don't think that ought to be the case. We think that if a consumer is engaged, there ought to be a way to monetize through advertising, through in-app purchases, potentially through both, as long as it's a really high-quality experience. I think that's a completely separate topic from a direct-to-consumer offering, and that has been an area of enormous growth for many of our titles, but again, not all of them. Obviously, if a title's only an advertising opportunity, that's not a relevant opportunity.

Speaker Change: Thanks for watching, and don't forget to like, share, and subscribe to our channel.

Speaker Change: It's really very excited by title. There are certain titles it really are.

Lainie Goldstein: We continue to expect for current consumer spending growth of approximately 3%, representing 77% of net bookings. Our current consumer spending forecast seems a high single digit increase for mobile, driven by Match Factory and Tune Blast, which are partially upset by declines in our Hypo-Casual Mobile Portfolio and Empires and Puzzles. We expect flat results for NBA 2K and as declines for Grand Theft Auto Online. We expect the net bookings breakdown from our labels to be roughly 50% single, 32% 2K, 17% rocks are games, and 1% other.

Speaker Change: Really aren't built for much advertising. They're really more meant for in-app purchases. They're titles that can be both.

Speaker Change: And then there are titles that really have to be ad-driven. We have all of those.

Speaker Change: And we want to make sure that we do offer appropriate ad units where they do make sense and that has been a very significant area of growth for Zenga since the acquisition and I think that will continue. We want to make sure that we monetize all of the engagement.

Strauss Zelnick: You know, this is historically the mobile business has been one where you monetize a very small part of the engagement. And that's, you know, we don't think that ought to be the case. We think that if consumers engage, there ought to be a way to monetize through advertising, through app purchases, potentially through both as long as it's a really high quality experience.

Speaker Change: Historically, the mobile business has been one where you monitor the very small part of the engagement.

Lainie Goldstein: And we forecast our geographic net bookings to be about 60% United States, and 40% international. We now expect non-GAP suggested unrestricted operating cash flow to be an outflow of $150 million, and we plan to deploy approximately $140 million of capital expenditures, primarily for game technology and office buildouts. We expect GapNet revenue to range from $5.57 to $5.67 billion, and cost of revenue to range from $2.38 to $2.41 billion. The total operating expenses are expected to range from $3.7 to $3.72 billion, as compared to $5.83 billion last year.

Speaker Change: And that, you know, we don't think that ought to be the case. We think that if consumers engage, there ought to be a way to monetize through advertising, through in-app purchases, potentially through both, as long as it's a really high-quality experience.

Strauss Zelnick: I think that's a completely separate topic from a direct-to-consumer offering. And that has been an area of enormous growth for many of our titles. But again, not all of them. Obviously, the title is only ad driven. That's not a relevant opportunity. We still really value our retail partners for distribution and marketing. We intend to stay in business with them. Our strategy is to be where the consumer is. We don't intend to cut anyone off or try to own 100% of the business. However, when it makes sense to go direct to consumer, we will. And that has presented an enormous margin opportunity for us.

Speaker Change: I think that's a completely separate topic from a direct-to-consumer offering, and that has been an area of enormous growth for many of our titles, but again, not all of them. Obviously, if a title's only ad-driven, that's not a relevant opportunity.

Strauss Zelnick: We still really value our retail partners for distribution and marketing. We intend to stay in business with them. Our strategy is to be where the consumer is. We don't intend to cut anyone off or try to own 100% of the business. However, when it makes sense to go direct-to-consumer, we will, and that has presented an enormous margin opportunity for us.

Speaker Change: We still really value our retail partners for distribution and marketing. We intend to stay in business with them. Our strategy is to be where the consumer is.

Lainie Goldstein: On a management basis, we expect operating expense growth to approximately 10% year over year. This is largely due to an increase in ongoing marketing support for Match Factory, as well as other mobile and immersive core launches planned for the year. The addition of gearbox and higher personnel costs partially upset by saving from our cost reduction program. Excluding incremental marketing and the addition of gearbox, our operating expenses are expected to grow low single digits over last year.

Speaker Change: We don't intend to cut anyone off or try to own 100% of the business. However, when it makes sense to go direct-to-consumer, we will, and that has presented an enormous margin opportunity for us.

Unknown Attendee: Yes. Great. Thanks.

Speaker Change: Great, thanks.

Chris Schoell: And the next question comes from the line of Chris Schoell with UBS.

Chris Schoell: And the next question comes from the line of Chris Schoell with UBS. Please proceed with your question. Great, thank you.

Chris Schoell: Please proceed with your question. Great. Thank you. You pointed to the multi-year ramp in bookings as the pipeline builds in 26 and 27.

Speaker Change: And the next question comes from the line of Chris Schoell with UBS. Please proceed with your question.

Chris Schoell: Great, thank you. You pointed to the multi-year ramp-up in bookings as the pipeline builds in 2026 and 2027. Lainie, can you remind us how you're thinking about operating leverage and efficiencies alongside the bookings ramp? I recognize you've been going through a period of development and investment, which has impacted margins in recent years, but is it fair to think we can see a return to more historic margin levels once your cost initiatives are implemented and these new titles are released? Thank you.

Chris Schoell: Great, thank you. You pointed to the multi-year ramp in bookings as the pipeline builds in 26 and 27. Lainie, can you remind us how you're thinking about operating leverage and efficiencies alongside the bookings ramp?

Lainie Goldstein: Lainie, can you remind us how you're thinking about operating leverage and efficiencies alongside the bookings ramp? I recognize you've been going through a period of development and investment, which has impacted margins in recent years. But is it fair to think we can see a return to more historic margin levels once your cost initiatives are implemented? And these new titles are released. Thank you.

Lainie Goldstein: Now moving on to our guidance for the fiscal second quarter, we project net bookings to range from $1.42 to $1.47 billion, compared to $1.44 billion in the second quarter last year. Our release date for the quarter includes Game of Thrones Legends and MBA2K25. The largest contributors to net bookings are expected to be MBA2K, the grant of daughter series, Tomblass, Match Factory, our high pro casual mobile portfolio, Empires and Puzzles, Words with Friends, the Red Dead Redemption series, and Merge Dragons.

Speaker Change: I recognize you've been going through a period of development and investment which has impacted margins in recent years, but is it fair to think we can see a return to more historic margin levels once your cost initiatives are implemented and these new titles are released? Thank you.

Lainie Goldstein: So I think we've come to 26 and 27, and we look at the pipeline and bringing it to fruition. We really have been working very hard in terms of reducing our cost structure, the organization, and looking at places that we could be more efficient. So we have announced a couple cost-cutting initiatives that we've been doing over the last couple of years and looking at ways to streamline our costs between our corporate departments and our labels, as well as look for areas that we can continue to improve. Also looking at our pipeline and looking at titles that we think will be the most commercially successful.

Lainie Goldstein: As we come to 26 and 27, and we look at the pipeline and bring it to fruition, we really have been working very hard in terms of reducing our cost structure, the organization, and looking at places that we could be more and more efficient. So we have announced a couple cost-cutting initiatives that we've been doing over the last couple of years and looking at ways to streamline our costs between our corporate departments and our labels, as well as look for areas that we can continue to improve. Also, we are looking at our pipeline and looking at titles that we think will be the most commercially successful.

Lainie Goldstein: As we come to 26 and 27 and we look at the pipeline and bringing it to fruition, we really have been working very hard in terms of reducing our cost structure, the organization, and looking at places that we could be more and more efficient. So we have announced a couple cost-cutting

Lainie Goldstein: We project with current consumer spending to increase by approximately 5%, which assumes a low double digit increase from mobile driven by the addition of Match Factory and Growth in Tomblass, which are partially upset by declines in our high pro casual mobile portfolio and Empires and Puzzles. We expect flat results for MBA2K and it declines with grant of daughter online. We expect gap net revenue to range from $1.29 to $1.34 billion. Operating expenses are planned to range from $982 to $992 million.

Speaker Change: Initiatives that we've been doing over the last couple of years and looking at ways to...

Speaker Change: Thank you all so much for joining us today and we hope that we've been able to help streamline our costs between our corporate departments and our labels, as well as look for areas that we can continue to improve, also looking at our pipeline and looking at titles that we think will be the most commercially successful, so we've been doing a lot of that this past year, and we'll see an annualization of those costs in fiscal year 26, so that will

Lainie Goldstein: So we've been doing a lot of that this past year, and we'll see an annualization of those costs in fiscal year 26, so that will improve our margins, and we expect to continue to look for those opportunities in the future, which will continue to improve our margins in 26 and 27 as well.

Lainie Goldstein: So we've been doing a lot of that this past year, and we'll see a utilization of those costs in fiscal year 26. So that will improve our margins, and we expect it to continue to look for those opportunities in the future, which we'll continue to improve our margins in 26 and 27 as well. Okay, great.

Lainie Goldstein: On a management basis, operating expenses are expected to grow by approximately 27% year over year, which is primarily driven by additional marketing from Match Factory, the Game of Thrones Legends, and the addition of Gearbox, partially upset by savings from our cost reduction.

Speaker Change: And we expect to continue to look for those opportunities in the future which will continue to improve our margins in 26 and 27 as well.

Chris Schoell: Okay, great. Thank you very much.

Unknown Attendee: Thank you very much.

Lainie Goldstein: Foundation Programs. In closing, we are confident in our ability to deliver a strong, multi-year trajectory of growth, to provide our industry-leading talent, our diverse portfolio of iconic, owned, intellectual properties, and our groundbreaking development pipeline. As we capitalize on our competitive advantages and pursue our strategic priorities, we believe that we will continue to grow our business, enhance our profitability, and deliver long-term value for our shareholders.

Ed Altert: And our final question comes from the line of Ed Altert with Jeffries. Please proceed with your question. Hi everyone. Thanks for the question.

Ed Alter: And our final question comes from the line of Ed Alter with Jeffreys. Please proceed with your question. Hi, everyone. Thanks for the question.

Ed Alter: And our final question comes from the line of Ed Alter with Jeffreys. Please proceed with your question. Hi, everyone. Thanks for the question.

Speaker Change: Okay, great. Thank you very much.

Speaker Change: And our final question comes from the line of Ed Alter with Jeffreys. Please proceed with your question.

Strauss Zelnick: Notice the big GTA update this June was right at the end of the quarter, where last year is a few weeks earlier. Could you just talk about how those two updates did kind of compare to each other rather than with the arbitrary quarter end? So we're actually really excited about the summer release for Detail in Line this year. It was a fantastic result for us.

Ed Alter: Hi everyone, thanks for the question. Notice the big GTA update this June was right at the end of the quarter where last year is a few weeks earlier. Could you talk about how those two updates did kind of compare to each other rather than with the arbitrary quarter end?

Speaker Change: www.unc.org

Lainie Goldstein: Thank you.

Strauss Zelnick: So, we're actually really excited about the summer release for DTL Online this year, and it was a fantastic result for us. In terms of comparing them directly to the – typically, we don't even really compare the releases. They're all very different, and we have different expectations, and they have different delivery times. This was very good for us, and it certainly helped us exceed our expectations for the quarter. But in terms of giving a direct comparison between this one and the last one, that's not something that we're prepared to do.

Strauss Zelnick: I'll now turn the call back to Strauss. Thanks, Lainie and Karl.

Strauss Zelnick: On behalf of our entire management team, I'd like to thank our colleagues for delivering results consistently to reflect our unique ability to provide the highest quality and most engaging entertainment offerings to our player communities.

Speaker Change: So we're actually really excited about the summer release for detail online this year and it was a fantastic result for us. In terms of comparing them directly to the – typically we don't even really compare the releases. They're all very different and we have different expectations and they have different deliveries. This was very strong for us and it certainly helped us exceed our expectations for the quarter. But in terms of giving a direct comparison between this one and the last one, that's not something that we're prepared to do.

Strauss Zelnick: In terms of comparing them directly to the, typically we don't even really compare the releases. They're all very different. They had and we have different expectations, and they have different deliveries. This was very strong for us, and it certainly helps us exceed our expectations for the quarter. But in terms of giving a direct comparison between this one and the last one, that's not something that we're prepared to do. Thanks.

Operator: To our shareholders, I want to express our appreciation for your continued support. We'll now take your questions. Operator? Thank you, sir. We will now be conducting the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star 2 to remove a question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, or we pull for questions.

Operator: Ladies and gentlemen, at this time we have reached the end of the Q&A session.

Strauss Zelnick: Ladies and gentlemen, at this time, we have reached the end of the Q&A session, and I would like to pass the call back over to Strauss for any closing comments.

Speaker Change: Thanks.

Strauss Zelnick: Now I'd like to pass the call back over to Strauss for any closing comments. I just want to thank our team that delivered these great results, as always. We believe we have the best and most talented creative teams in the business, and we're so grateful that we do. We have a phenomenally talented executive leadership team as well. We have well-in-a-half thousand colleagues all around the world who work really hard every day in service of delivering the best entertainment to our consumers. That's what they deserve, and that's what we aim to give them.

Speaker Change: Ladies and gentlemen, at this time we have reached the end of the Q&A session and I would like to pass the call back over to Strauss for any closing comments.

Strauss Zelnick: I just want to thank our team who delivered these great results, as always. We believe we have the best and most talented, creative teams in the business, and we're so grateful that we do. We have a phenomenally talented executive leadership team as well. We have... well, over a half thousand colleagues all around the world who work really hard every day in the service of delivering the best entertainment to our consumers. That's what they deserve, and that's what we aim to give them. Thank you for joining us today. We're really optimistic about the rest of the year and the years ahead.

Strauss: I just want to thank our team that delivered these great results as always. We believe we have the best and most talented creative teams in the business and we're so grateful that we do. We have a phenomenally talented executive leadership team as well. We have...

Doug Cruz: And the first question comes from the line of Doug Cruz with TD Cowan. Please proceed with your question. Hey, thanks. Your largest peer just released a college football game that is done exceptionally well as I'm sure you've seen just curious if that's caused any thoughts about potentially adding a college basketball feature to MBA2K, whether it's a unit based item or just another mode in the game. It seems like there might be a nice opportunity there.

Strauss: 12,500 colleagues all around the world who work really hard every day in service of delivering the best entertainment to our consumers. That's what they deserve, and that's what we aim to give them. Thank you for joining us today. We're really optimistic about the rest of the year and the years ahead.

Strauss Zelnick: Thank you for joining us today. We're really optimistic about the rest of the year and the years ahead.

Operator: And ladies and gentlemen, that does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Operator: And ladies and gentlemen, that does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: And ladies and gentlemen, that does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Doug Cruz: Thanks. Thanks for the question, Doug. So yeah, obviously we did. We have noticed the success of college football. It's exciting to be in the stream. We take a note of that. We obviously do have a history with college football. And we're always listening to our community and their interest to see if there's something that we might be able to do in the future. That's across the board, not necessarily just with college football, but generally speaking. Nothing to announce now, but obviously it did. We did take notice of it. Okay, thank you.

Colin Sebastian: And the next question comes from the line of Colin Sebastian with Baird. Please proceed with your question. Thanks. Good afternoon, everybody. I guess first off, we've at least a year or so to go on development of the next GTA was just curious if you could sort of outline perhaps generically at this point in their production cycle of a game at the scale. What parts of development are left to complete? I guess are you still in the midst of core development? Are you approaching the testing stage? Any sort of color there, I think would be interesting.

Colin Sebastian: And as a follow-up, Laney, the increase in op-x guidance for the year is that more to support with marketing new titles or is that something related to Gearbox? Any clarification there will be great. Thank you. Thanks, Colin. You know, first of all, where are we going to be in-depth with the title specific? So at the stage of the game, it really would vary depending on the title. There's really no cookie cutter answer to your question.

Colin Sebastian: But in any case, it's not the kind of insight that we would give with regard to any specific development, in terms of the increase in the effects is mostly driven by the acquisition of gearbox and to a lesser extent higher marketing personnel and occupancy expenses. Okay, thank you guys.

Andrew Marok: In the next question comes on the line of Andrew Marok with Raymond James, please proceed with your question. Thanks for taking my question. And maybe kind of a corollary to the last question, but with the news of the strikes getting underway, I've seen the reports that it won't affect games and development before September 23, but maybe for some of the earlier stage projects, how are you able to adapt your processes to still make headway?

Andrew Marok: And is there a point in the dev process where you could hit blockers? So, look, we deeply value our talent relationships and historically, we worked very successfully with all of the unions including SAG after. We continue to work hard to come to a resolution on this current situation. In fact, the common ground on 24 out of 25 proposals, so I'm pretty confident that we can we can get to a deal that will be mutually beneficial.

Andrew Marok: At the same time, we don't expect any impact whatsoever on our titles that are in development. If the strike went on for a very long time, obviously that would affect us and that wouldn't be a gross work for the industry.

Andrew Marok: Okay, great. We're cautiously optimistic we'll be able to find common ground and that's certainly that's certainly our goal.

Andrew Marok: That's it.

Andrew Marok: Thank you. And then and then maybe one quick clarification question on the back of that. Is there anything to consider on the expense side related to the strikes like potential savings from stop labor or is that just something that probably isn't very material? Thank you. So, we certainly we don't get any benefit from the situation.

Drew Krum: And the next question comes in the line of Drew Krum with Steve. Please proceed with your question. Okay. Thanks. Hey guys. Good afternoon. So I want to go back to Doug's question on college football. Is it related to NBA 2K curious if you're seeing anything in terms of leading indicators you track or anticipating any impact on sales from, you know, what appears to be now more crowded sports category. And then Laney just on RCS, it looked like it was a tad off your guidance for fiscal 1Q, but you kept the annual outlook on change can just reconcile the two. Thanks.

Drew Krum: Thank you for the question, Drew. In terms of the question on college football, no, we're not expecting we're not seeing any significant or any impact on our NBA title based on success. We're always competing for the customer's mind share and while across all titles, so I don't necessarily think it's necessarily a sport issue for us, but no, we're not expecting any effect on NBA 2K 5. And for the RCS all year, it's being driven by match factory and June blast. So that's why we're able to keep the full year, which is good news. Yeah. Thanks, guys.

Benjamin Soff: And the next question comes from the line of Benjamin Soff with Deutsche Bank. Please proceed with your question. Hey guys, thanks for the question.

Benjamin Soff: I wanted to ask a little bit about Star Wars Hunters, and it seems like the first game of that type that you guys have released since acquiring Zinga, and so to this provide a blueprint to bring more AAA content to mobile and just kind of curious to hear thoughts there. Thank you. We're very happy with the Star Wars Hunters. It was a really ambitious title. I think the team at Natural Motion has done a great job, and I think the Zinga label actually has been really excited to launch this cost platform title based on beloved IP.

Benjamin Soff: And it's early yet to see how it will perform. So the jury is out, but it's off to a really good start. And I do see it. I think this successful development does potentially inform other titles, but each title stands alone. And as you know, it is our preference to focus on intellectual properties that we own.

Benjamin Soff: And then in the quick follow up, it looks like the outlook for NBA RCS change a little bit. Just curious if you could drill down into the moving pieces there. Thank you. So we had a slight mission Q1. That was driven by few active users and enters this year, which was driven by lower sales of units due to the Gen 8 unit. But when we look at the full year, we expected overall.

Benjamin Soff: And a lot of that is driven by NBA 2K 24. We still have the same expectations that we did for NBA 2K 25 if we did at the beginning of the year. Okay, that's helpful. Thanks, guys.

Martin Yang: And the next question comes in the line of Martin Yang with Oppenheimer and company. Please proceed with your question. Thanks for taking my question.

Martin Yang: First question regarding your overall view. Can you give us an updated view on your approach to UGC across different franchises and how are you open to maybe modding both on PC and console for your future games? We've been very open-minded and we certainly are very excited about many things that our users are delivering in their engagement with our titles and other people's titles. Obviously, you know, we're excited about what we see in the modern community for GTA and we think that's pretty exciting.

Martin Yang: At the end of the day, you know, entertainment companies need to bring great entertainment to consumers. That is a starting point. And I'm not a believer that the industry will turn into a UGC driven industry. However, for certain titles, for example, Roblox, you know, they are really more platforms than they are in digital entertainment titles, of any sort. And if consumers want to add to that and enhance that for their own use, generally speaking, we would like to enable that behavior, generally speaking, protective of our intellectual property, we're protective of other people's intellectual properties. But we do think that can be a positive addition to the industry. I don't think it will define either our company or the industry, however. Got it.

Lainie Goldstein: Thank you. Another question from Lainie. Can it be clarified if GTA and in the 2K-24, did both franchise role bookings on a yoga basis in the first quarter?

Lainie Goldstein: So for the quarter, for GTA, we saw some, the title declined for net bookings in RCS. I'm sorry, what was the second title that you asked about? 2K-24, Comparison 24-23. I don't have 24 first, 23, but in general, MDH2K declined in the quarter. Thank you.

Lainie Goldstein: That's it for me.

Mike Hickey: And the next question comes from the line of Mike Hickey with the Benchmark Company. Please proceed with your question. Hey, Strauss Karl. Lainie, Nicole, great choir guys. Thanks for taking our question. Just to Strauss, obviously, a lot of debate on our economic future here, near-term, always curious, European, but I guess more importantly, just how you're thinking about maybe sort of a darkening macroeconomic picture impact on your business. You already sort of weathered one storm on a mobile life service and you feel like you're more resilient if you go into a more challenging environment again.

Mike Hickey: And then, number two, it looks like trends in current and hardware sales have slowed. And prior, Jan is feeling pretty sticky here. Some of that may be the macro. Some of it may be just haven't seen the price release Strauss that we normally do at this point in the cycle. And other pieces may be, you know, services like GTM, I'm still being very strong on prior, Jan. So just curious your view on sort of where we are in the cycle and what implications it may have for your business. Obviously, if it's impacted in the A, but thinking about maybe new software that is more current-gen versus prior-gen, what sort of challenges opportunities you might have in that situation.

Strauss Zelnick: Thanks, guys. As drawdowns go, it was not a terrible drawdown. The unemployment rate at 4.2 or 4.4 is still very low. An employment of 114,000 jobs are so added in the period, which is solid. As you know, people have left the workforce. So I'm not particularly worried from, you know, one report that we're heading into some kind of consumer recession. I don't see it now. I'm also not in the business of predicting that sort of thing, but the metrics don't support that.

Strauss Zelnick: Generally speaking, the entertainment business is pretty resilient in such a situation. Of course, the business is not counter-cyclical. And, you know, in some massive downturn, we of course would be negatively affected, but I just don't see that on the horizon. So not a current concern for us, and we're awfully well positioned. As you know, our industries back in growth mode, consult, businesses, and for software, that is low single digits, mobile's up mid single digits.

Strauss Zelnick: So there are tailwinds, and our mobile business is really performing with all these new great titles, which we reference today. And we're really excited about our consult pipeline as well, which we think will continue to perform. You know, obviously, we're announcing a quarter where we're right on track. We've very consistent results that are squarely within or better than guidance and consensus. We've reiterated our guidance for the year, and we've said that we expect tremendous growth in fiscal 26 and 27.

Strauss Zelnick: So we're about as optimistic as we can be without overstating the case, something that we try really hard not to do. Specifically, with regards to hardware, I saw the same stats that you did, and it looks like if you just measure four years in, last time this time seems to be like there's a bit of slowing, and the report I saw said, well, we're the pro devices and the like. But everything always changes.

Strauss Zelnick: Four years ago, KC wasn't anywhere near as meaningful as it is today for console type releases. You know, that's a big growth market. And no, I don't think what consumers are saying is they're good with Gen 8 and don't care about Gen 9. We saw the exact contrary with regard to NBA 2K, where Gen 8 actually was not a high performer and performed worse than we expected Gen 9 has been incredibly powerful.

Strauss Zelnick: So I think the Gen 9 platforms will continue to perform. I think you'll continue to see meaningful growth in that installed base. And I wouldn't put too much weight on a particular period of time. I was asked earlier today by someone, you know, what's next on the hardware side?

Strauss Zelnick: And we're done in the hardware business. And I wouldn't even know how to answer that question. But what's next on the entertainment side and the software side is we've got a bunch of great titles in market, great live services, and great new titles coming. We have the best pipeline we've ever had and it's close to coming to fruition. You know, we feel really great about that.

Strauss Zelnick: Thanks, Dras. Good luck.

Omar Dessouky: And the next question comes to the line of Omar Dessouky with Bank of America. Please proceed with your question. Thanks for taking my question.

Omar Dessouky: Strauss, I wanted to ask you how big is the opportunity for a second soccer simulation game in the market? Whether you would comment on any rumors about 2K acquiring the FIFA license and what your philosophy is on developing sports games, how long you might take and what your strength might be in that regard. Yeah, there's a lot there. Look, we're in the soccer business. We have the number one mobile soccer manager title in top 11.

Omar Dessouky: We're really happy that we do. And we're also very mindful that it's incredibly difficult to build a great sim experience for console takes a long time and that if you do a right, you know, your users are very loyal and very embedded. I would just know with regards to the FIFA license that it does not bring along with it rights doesn't come with players, teams, or leagues. So it's not as simple for example as negotiating with the NFL or the NBA or MLB where, you know, at most you often negotiate with league and a players association.

Omar Dessouky: So for anyone who would want to compete in a straight ahead sim environment for soccer, you know, you wouldn't just have to address one particular brand license if there's a whole lot more than that. And I think from our point of view, we have a great sports portfolio led by NBA 2K. We have WWE 2K, which is growing and profitable, really robust. We superb partner in TKO, great partner at the NBA with the NBA and the NBA players association with great partners, the NFL and the NFL players association were in the tennis business were in the golf business. So in the list goes on, you know, I'm sure we will make more announcements in due course.

Omar Dessouky: Thank you very much.

Clayton Griffin: And the next question comes from a line of Clay Griffin with Moffit, Nathanson, please proceed with your question. Hi, good evening. Thank you.

Clayton Griffin: Curious on this, the year of your change in advertising that rather than I suspect that's something to do with the reorientation of the hyper casual business, but. But trust maybe maybe just talk about what you think advertising can do for your more core portfolio of mobile titles, like like what you have in peak and. Would you prefer to see kind of, you know, I guess external sources of demand and advertising there, where do you think the bigger opportunity is to continue pushing to direct the consumer and really just, you know, investing in more of the an app side.

Strauss Zelnick: It's really very titled by title. There are certain titles that really are really aren't built for much advertising. They're really more meant for an app purchases. They're titles that can be both. And then there are titles that really have to be ad driven. We have all of those. And we want to make sure that we do offer appropriate ad units where they do make sense. And that has been a very significant area of growth for Zenga since the acquisition.

Strauss Zelnick: And I think that will continue. What we want to make sure is that we monetize all of the engagement. You know, this is historically the mobile business has been one where you monetize a very small part of the engagement. And that, you know, we don't think that ought to be the case. We think that if consumers engage, there ought to be a way to monetize through advertising, through an app purchases, potentially through both as long as it's a really high quality experience.

Strauss Zelnick: I think that's a completely separate topic from a direct to consumer offering. And that has been an area of enormous growth for many of our titles. But again, not all of them. Obviously, the title's only ad driven. That's not a relevant opportunity. We still really value our retail partners for distribution and marketing. We intend to stay in business with them.

Strauss Zelnick: Our strategy is to be where the consumer is. We don't intend to cut anyone off or try to own 100% of the business. However, when it makes sense to go direct to consumer, we will. And that has presented an enormous margin of opportunity for us. Yes. Great. Thanks.

Lainie Goldstein: And the next question comes from the line of Chris Schoell with UBS. Please proceed with your question. Great. Thank you. You pointed to the multi-year ramp in bookings as the pipeline builds in 26 and 27. Lainie, can you remind us how you're thinking about operating leverage and efficiencies alongside the bookings ramp? I recognize you've been going through a period of development and investment, which has impacted margins in recent years. But is it fair to think we can see a return to more historic margin levels once your cost initiatives are implemented?

Lainie Goldstein: And these new titles are released. Thank you. So I think we've come to 25 and 27 and we look at the pipeline and bringing it to fruition. We really have been working very hard in terms of reducing our cost structure, the organization, and looking at places that we could be more efficient. So we have announced a couple cost-cutting initiatives that we've been doing over the last couple of years and looking at ways to streamline our costs between our corporate departments and our labels as well as look for areas that we can continue to improve also looking at our pipeline and looking at titles that we think will be the most commercially successful.

Lainie Goldstein: So we've been doing a lot of that this past year and we'll see a utilization of those costs in fiscal year 26. So that will improve our margins and we expect to continue to look for those opportunities in the future, which will continue to improve our margins in 26 and 27 as well. Okay, great.

Lainie Goldstein: Thank you very much.

Ed Altert: And our final question comes from the line of Ed Altert with Jeffries. Please proceed with your question.

Strauss Zelnick: Hi everyone. Thanks for the question. Notice the big GTA update this June was right at the end of the quarter where last year was a few weeks earlier. Could you just talk about how those two updates did kind of compare to each other rather than with the arbitrary quarter end? So we're actually really excited about the summer release for detail in line this year and it was a fantastic result for us.

Strauss Zelnick: In terms of comparing them directly to the, typically we don't even really compare the releases. They're all very different and we have different expectations and they have different deliveries. This was very strong for us and it certainly helped us exceed our expectations for the quarter. But in terms of giving a direct comparison between this one and the last one, that's not something that we're prepared to do.

Strauss Zelnick: Thanks.

Strauss Zelnick: Ladies and gentlemen, at this time we have reached the end of the Q&A session. Now I would like to pass the call back over to Strauss for any closing comments. I just want to thank our team that delivered these great results as always. We believe we have the best and most talented creative teams in the business and we're so grateful that we do. We have a phenomenally talented executive leadership team as well.

Strauss Zelnick: We have well-in-a-half thousand colleagues all around the world who work really hard every day in service of delivering the best entertainment to our consumers. That's what they deserve and that's what we aim to give them. Thank you for joining us today. We're really optimistic about the rest of the year and the years ahead.

Operator: And ladies and gentlemen, that does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation. David Karnovsky, David Hickey