TTWO - Earnings call transcript Q2 2019 | Take-Two Interactive Software, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Take-Two Interactive Software Second Quarter Full Year 2019 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded. I would now like to turn the conference over to your Hank Diamond, SVP of IR. proceed. Please

Henry A. Diamond

XXXX. and results joining of Take-Two's for XXXX Chief September Welcome to conference fiscal Officer. Chairman you be Financial and ended its will Lainie Officer; discuss the XX, our and thank Chief afternoon. Strauss Karl Take-Two's for call year led Executive Good by call Slatoff, Zelnick, President; Today's second our quarter Goldstein,

remarks. during be the your Q&A available our following will We questions prepared to session answer

everyone that considered we made I'd federal available begin, of to remind as as not are are Before call our this facts securities statements well currently are to beliefs assumptions forward-looking statements us. that on forward-looking like during under the made based management information laws. by historical These statements and

XX-K these are Actual variety to filings in results statements We operating vary these factors obligation discussing all a with Form based SEC, recent stated, summarized Form Factors. XX-Q, Risk entitled to report and GAAP are significantly will the on also have on important described no year-over-year. risks forward-looking like These section the statements. we be company's from numbers most forward-looking including that, I'd unless in all note comparisons annual our including otherwise report the factors. are today and the quarterly update on of may

internally our order uses outlook operating financial in our Additional our management including adjust financial and items our are contained performance. in details that results evaluate actual regarding press release, our to the results to GAAP

results our website we deck have visually slide and presents outlook. addition, to financial our a In posted that

filings over www.takeXgames.com. now, from to and I'll with turn SEC the Our obtained at call may And our Strauss. the website press be release

Strauss H. Zelnick

today. NBA as release as was outperformance Grand Take-Two This better the in thank Theft you bookings. Good Grand Online and of Theft to I'm net growth XKXX. quarter, XX, that critical expected NBA XK report afternoon primarily V us launched On Hank. during than delivered Auto well operating Thanks, XKXX by including the second pleased results, joining for driven to September and successful Auto acclaim.

Forbes best Informer noted, this perfect the series a there's as is called of and XKXX no such as lifestyle. game, the it sports game, the but gets. title NBA isn't Game as a a said IGN it's just close thing

During the second by bookings driven XKXX growth last better in release, NBA quarter, recurrent than expected net spending. XX% grew from consumer year's over

sports to month achieved and of in In combined sales According in the game of represents of NBA XKXX title biggest addition, XXXX launch began it since on launch XKXX is increased sales best-selling in digitally-delivered any the tracking sales the sports NBA of Group, digital highest XK NBA terms dollar of XKXX series, NBA the the year-to-date. U.S., released the physical game in game and industry now based sales significantly. NPD the any XXXX.

basketball benefit to continues spending. from and strong Our engagement consumer industry-leading series recurrent

increased XKXX. For percentage and games NBA NBA revenue currency virtual who buy digits per players XKXX, over of have user, all online played, double average

a new to During XX% spending record. grew quarter, the consumer NBA recurrent XK on second approximately

the NBA single fact, spending consumer the In contributor was in period. XK recurrent to largest

year-over-year. release. standard basketball Concepts We NBA period like expect this entertainment. in spending for grew and be would consumer for sales has worldwide in and Theft for Recurrent recurrent close that to sequentially interactive title and XK quarter a beloved XK, flat spending. tremendous terms sports continue Even on consumer to from there the and expectations consumer games highest believe exceed ever NBA it to series the the setting in title. remains net XKXX, with sports its continuing of including congratulate since a we second bookings recurrent substantial to Auto our unit was Online innovate every opportunity for success, Grand spending, in I'd both Visual the XK as the

with they new V Sales Auto Grand quarter, planned Theft supported more XXX much an array also Grand going now Hours expectations of sold update, units. the and have During Auto content, of Games highly more in outperformed Theft highlighted Rockstar forward. and title million the Online our successful with After than is the

for Our in including SuperCard stay WWE Online consumers results other mobile our by China. and engage captivated were innovative a remains variety with offerings, organization. Delivering key XK our for titles Point's NBA after strategic priority second quarter new also NBA a initial X XKXX, of by enhanced and and Social games, ways their launch to

spending quarter, the of total XX% XX% bookings. net expectations, exceeded and growing our During recurrent consumer second accounting for

net virtual addition spending grew was sequentially Theft two its bookings was for of enhanced Social In recurrent Auto a NBA contributor Point quarter. to again consumer and two the biggest variety a games Grand free-to-play Online, these over Legends. the In to once Monster by Combined category, currency our City first titles, from offerings. through and XK Dragon results significant mobile

SuperCard Point the for launch Online for combined in million Season be the stand NBA XX%, includes released now X XX% WWE And times. remains X. the currently X August. China meaningfully the grew October fall. its spending highly Games with led Redemption PC franchise XK XK net Online predecessor during Rockstar game downloaded grew remains launched content NBA Add-on three China. over registered XX, On XK driven anticipated supported that Dead SuperCard been focused million second X Civilization Sid NBA Red XX quarter its Social X. title, exciting WWE Meier's which people SuperCard number has Total in by new Recurrent WWE platform XCOM in of of XX XK and games pipeline, the in consumer and game this and users – announced contributed on has updates will development. its online on offerings and by and sports XX Online one also fees

received resounding best Game most first sold expansive and of and original the deepest Red first to-date features including GQ more days. world $XXX best X at sold-in game; intimate. Dead the records, likely Dead team the has Redemption reviews as IGN, influential a Post and sold-in said, units eight Guardian, as Redemption a called expectations Redemption Digital its of And Rockstar vast Dead what Rockstar's generation. The but XX Redemption with title for has Telegraph, for raised highest Red up again Trends awarding in can be the worldwide. Dead million level. Dead title over others. that's what years. of all for to first with Hollywood among it, The including on Redemption studios numerous Dead the X,XXX the in Red has X The title of outstanding its days grand, how lasting Rockstar raising PlayStation best Red are over than year, with the current blockbuster and Reporter future. said in retail the jaw-dropping critical decade. X creatively than X in opening I'd of impact not every Redemption of magnificent Metacritic bar is Redemption undoubtedly rated a achieving One title experience Red they adventure CNET Red the delivering in the score, just game Dead Washington as success. on Theft is The Games collaboration wrote, Game Xbox like the X in the delivered from Auto built XX the UK biggest a million the the during to-date. more team and Redemption perfect the Dead Dead X in exceeded ground V today, has game X Red three history units Rockstar Rockstar sell-through once bar our congratulate is Informer, Red weekend label's interactive including X set yet entertainment, console commercial Redemption first has entertainment, tied worldwide, numerous sales narrative also has will the Our X with Red members, as critics eight is the and And open-world have games Grand now for score. made entire the achieved well a

strong outlook one record year a quarter results we're Redemption outstanding As X, our bookings and from Dead This to organization's early our most net in of for performance second fiscal XX-year is financial exciting XXXX, operating a adjusted be in poised flow. the of for which history. increasing Red result times and our also is cash the

keeps in consumers Creatively, enabling interactive the on the development inorganic. to to and a the and are both record to is platforms our to our capital reach finally, company captivates we're engaged. we them all most sector. quality to home in best teams be the the never in allowing industry. distribution excellence. committed to needed Operationally, organic entertainment evolve to our further compelling and business before track entertainment models capitalize trends exceedingly well-positioned that and pursue have opportunities, to we're And Take-Two proven expand highest We efficient access delivering and like globally. have business, positive of business strive all which the audiences technologies, New

and I'll now better over is to the positioned deliver to turn ever result, the a returns our As shareholders growth than Karl. Take-Two long-term. over call for

Karl Slatoff

unique to million as XX AJ Pass, On fun is upcoming Playgrounds alive featuring Switch, said, to out where release Developed from should is WWE offering new PlayStation Playgrounds installment perfectly our noted, timed our with the finalist ring Carnival arcade well who I'll win as Switch, a for XKXX X. X.X other features people continues a a game worldwide in of XK family-friendly fun for the is launched over NBA to the re-imagined On critics, and to of legend template alleys multiple is including game up years. the has proves XK of for or the popular October content, On friends, of XKXX, being bolstered console's fans phenomenal, XX that X, Yesterday, called alone ages. players, Strauss. critical play be Games franchise who fantastic The One. including one-on-one XKXX and four look will style basketball NBA entertainment own, gamers post-launch downloadable recent with or Bleacher the XX, a and The year acclaim. Playgrounds Styles basketball with X accessibility positive X Offered leveraging arcade Dollar played in the family all of series. Challenge, world. popular prize. your being an MyCareer from XXX XK two-on-two, one the worldwide a our at reviews Carnival at updates NBA launches. compete million and IGN grand the with IGN Abdul-Jabbar, rated the Concepts, for sold-in including controllers. that the unique is units alone, Games in or collaboratively by Joy-Con against supported X of NBA price against like This begin exciting playgrounds. future Xbox on Season title additional exactly Visual title a Nintendo additional as holiday Yukes is still $X with or X the basketball and go, Kareem series XK what series the is simultaneously, can that four friends. Thanks, XK well. throwback by Nintendo the offerings game is on Report, this WWE as discussing can latest of the with returned the and games played NBA October features well be Million The ways supported sports our XK with game Today, pick-up-and-play to earn to that and title and $XX.XX, WWE point season. received home classic chance

releases. first On franchise's months for in digitally this title PC versions and Club PGA on first HB XK XX% the XX, two units North November sold XK summer, by game XXXX market, for year's and X One. last consoles official launched will America, upcoming the featuring in Xbox than more The internationally, our its of physical past TOUR featuring the release release XX, the license. in Within to TOUR Studios, over Developed edition. and these marking Golf PlayStation Turning November PGA

November complement continue fun, our that The XXXX Club engaging most Operation featuring to game and won XX, well and and experience TOUR will to GameSpot With opportunities content the XXXX. drive pleased calling for Game Switch, that series. The launch Game and VI four On comprehensive and portfolio new a Strategy VI DICE Awards' latest it's on In the addition, improvements Sports And offerings. Nintendo golf we and for agreed civilizations, explore forward XK Switch. both updates date. Firaxis scenarios. Meier's exciting, Sid virtual it, authentic, Best is and to Awards' PGA packs Civilization Nintendo title the additional will leaders Games include to as the simulation add expand golf sports as critics our Golf We're and saying, Civilization

enjoy Vault perspective in more. bring and specific genre-defining We with skills beloved, are world more Software new title and will Nintendo shooter-looter to with digital brings VR-specific turn PlayStation iconic strategy for brand Hunter Switch. and Mega like gamers Time, driving, to XK BadAss first-person critically-acclaimed the the series the one Available franchise download, like taking new abilities On Pandora Borderlands all never Gearbox XX, Borderlands VR. December of that confident VR VR features award-winning before and life and on X our will the Fun

phenomenal experience holidays, Redemption the fans against Strauss both cooperative Pandora in PS Red to game-play moment this this engagement, Access VR be VR. Dead X. Theft with enormous is Just grow public original of evolution be will drive fun for Rockstar Using friends, the all in on will experience Red for the and our new again to including Game congratulating the VR Red competitive multiplayer to like with get Rockstar beta Dead Online, blending a months, the Redemption, initial arrival Dead Online, and classic join open backdrop set Dead of a X once are and time an is Games take Online Online of to vast Borderlands X Redemption Dead constant I'd of for your the both of planning Xbox month, additional we guns into Red with players. launch with updates Dead world feature in the to the excited to to saying, press Red of on grab continue to Redemption Borderlands Informer Games and or consumer an Red Dead X Dead world. PlayStation online Dead a and the designed Later X's connected Online success in titles gameplay ways. ready evolve narrative explored adjustments and Grand on updates and foundation, new will be Auto content support more. X Red with purchase with the will free One. WWE alone Red as In Red SuperCard and coming Redemption for experience of

In offerings mobile devices. continue to broaden addition, for we'll our

draft into League players to of league, additional company. completion draft forward teams four Season Non-retained on the conduct that players or Season potential for draft identify pool to the Following America one will signed to compete to progress continued We began teams outside pool. will growth for X. the the of North profits plans look has NBA of for inaugural will season, from for November engagement The long-term successful also XX process more NBA to be the driver League's The bringing XXXX first be and enhance the X. XX. automatically and meaningful our which a tournaments have international XK a and the season week additional qualification total to entered Season in last X conclude the of XK

Looking releases ahead, intellectual which pipeline, our labels groundbreaking, had a development our includes franchises. properties renowned from strong new and

business in new ways. returns about over ability value to in call and experience enabling This time by and continue turn industry reach us to dynamic and to all provide now the our future In models, our offerings to to emerging are continue that and new confident excited We're consumers for our an is and platforms, support vast the enhance long-term. over I'll addition, designed engagement. the company markets opportunities for with drive presented to with shareholders we'll players to the games incredibly Lainie. consumers our

Lainie Goldstein

outlook quarter. review for as successful the XX% that Total XXXX. afternoon, well year $XXX contained outperformance in Digitally-delivered which NBA and $XXX grew discuss expected our fiscal XKXX. outlook our Today, results Karl, of good million to outlook Theft due of net and regarding results our accounted the financial Online, million, actual and than quarter XX% bookings note the of second exceeded launch and million, to result $XXX total. in the Please Auto mentioned, Strauss V are quarter for I'll to Grand our range third Thanks, to Theft $XXX release. million our of and bookings second delivered operating and our details everyone. grew Grand net as the primarily business Auto additional better financial press then

the last XX% expectations. our During of of up that our quarter, delivered exceeded from second XX% games were a digitally, result year, console sales current-generation

marketing spend And million Turning quarter increased to increased by and of loss $XX that the to $X.XX $X.XX titles technologically as sold expense up goods well primarily cost XX% prior year per net $XXX revenue feasible. for net Operating $XXX $XXX income expenses are decreased period. or to was of higher share some as income by million, a details second million. not in X% GAAP XX% from million our to million to $X per R&D statement, GAAP from share, due or

Now, of the with financial quarter. the XXXX I'll third review fiscal highlights operating fiscal our starting and outlook,

Red year, Dead net Auto bookings Online, to to $XXX Theft XKXX, $X.X WWE congratulating achievement. million delivering Redemption I Karl are largest net and Grand creative to from expected this for in by and Games V, $X.XX like launch and incredible XKXX. Rockstar X. commercial Theft expect last NBA third Auto be record-breaking from the would to range driven the Strauss X, Red quarter billion Redemption contributor Dead join to We bookings The in billion, Grand up of and

be expect by XX%. spending booking flat approximately consumer increase recurrent net and around expect digitally-delivered to We to we

XX% current-generation assumes delivered digitally, up that year. from in XX% our will quarter forecast of be last the Our third console games

$XX to primarily midpoint, of and revenue from over GAAP expense. million year, Operating from a $XXX And are expected range driven or the range $X.X to to GAAP is million million. We million to $X.XX billion, range $XXX net marketing $XXX from cost higher last million. goods expect range increase expenses this from $X.XX expected to share. At represents to to XX% $XXX to by net to income $X.XX billion per million sold $XX

Red Redemption mobile this X bookings and Online. Theft midpoint, X bookings by are Auto the NBA Turning our by to forecast Grand Auto and represents We fiscal V, raising prior The the $X.X modestly largest results and V we outlook Online fiscal net XKXX to our a Social XKXX. Red These increase recurrent Auto expected our and and WWE offset on NBA outlook Points well XXXX XK, launch outlook for Dead full we which Grand primarily and up range forecast WWE lower XK. of billion. higher as over Redemption $X.X Auto are of net driven NBA the net Red $X.X to than XK by and bookings for increased year, XXXX our from to fiscal Dead Theft billion expected second for Grand result be a partially are Theft offerings. Online, to $X.X as offset operating At Grand of Redemption partially expectations unit X Theft billion primarily outlook NBA now XK, stronger Dead XX% from consumer growth to spending Red Dead expected to from as billion, contributor reduced from quarter be

XX% approximately bookings Games, in United our we net Social we label the net expect forecast Rockstar split States bookings teens breakdown and And bookings and the growth our to other. grow and about recurrent expect now roughly international. XX%. We XX% from XX% Points XX% geographic have forecast the be to digitally-delivered XK, spending and consumer be to increased X% We net low to

XX% download year full-game that XK console XX% delivered is Redemption up expectation our current by XXXX. forecast XXXX, primarily We a for digitally-delivered forecast prior XX%. and higher NBA for up increased Red Our fiscal now of mix and games of from generation net Dead be bookings last driven will X digitally our in from

we increase cash adjusted generate to approximately nearly $XXX in new cash included cash prior is that in accounting We is measure is It a adoption flow, and Adjusted prior cash. GAAP restricted activities $XX defined which for expect standard, as changes X flow our operating within April reported our requires our implied from activities as new what to restricted of to net which changes operating from cash million adjusted a from XX% $XXX approximately net expenditures At be by costs deploy GAAP to our statement. per higher operating outlook. a cash R&D million. million billion flow billion non-GAAP equivalent the midpoint, primarily to expect in million our represents IT $XXX sold this cash capital net operating income range million Total represents $XXX increase GAAP And and personnel, to range expenses. marketing, operating expenses or revenue are the to million $X.XX forecasted $XXX from from prior to share. million to to to we $X.XX year, driven net plan over goods to range of from $X.XX and for GAAP $XX billion. $X.XX $X.XX with We $X.XX billion from range formally to

and For XXXX, reporting are tax operating results expect year. In during purposes, for full produced of record closing, poised first to management the we Take-Two we be strong rates XX%. to generate fiscal the our results half

the call creative Strauss. our Over you. operational strong assets, shareholders. to the company growth industry-leading position deliver commitment back turn firm excellence, foundation expansion I'll margin and to Thank to for now long-term, financial our and our

Strauss H. Zelnick

continued Lainie. To questions. another now and and hard team, for to behalf want for I quarter. support. Thanks, your for Operator? to successful Karl our colleagues our And our I'd dedication take shareholders, entire management thank express on delivering like work your of our On appreciation we'll and their

Operator

Thank you.

with your Olson with comes Jaffray. Piper question question. Mike Please Our from proceed first

Michael Olson

Rockstar this on it'll point, the launch. Hey, results period at of we're But time. days seeing Online GTA realize and of longer material from relevant and X Red to be Red manner think it over and Redemption related the probably good somewhat a Dead I coming just into likely when you of XX you're and cannibalization that, for will be will Redemption congrats content launch any do only kind in Dead a only release afternoon, X? they're is Thanks. updates the this released in staggered V And quarters GTA or they of that ready? the

Strauss H. Zelnick

I've from be themselves, with been products all. Redemption if asked make And repeatedly not come all that And over you compete some of with Games to fact any nothing a title Dead I alone. to you, want see felt out good Rockstar there, question, that, any that with my consume don't market, because is there's do has we and all there's competitive it it potentially does X all at at bunch stuff in with specifically expect any. prior answer They to calls cannibalization less they the you your any appeals more about time. view games, not marketplace. need The Red do all, compete nor other entertainment if whether or given cannibalization, the would products, And they stand issue. I an entertainment nothing everything compete in

Michael Olson

you. Thank

Operator

Tim from with with comes question next Our your Jefferies. question. Please proceed O'Shea

Timothy O'Shea

Yes.

we item. game should you of through through is if see I'm the type December this that season? of this I'm of Dead, wondering that type nice will question. So, my this Was the early And taking activity the just sales expect of what Red the Dead for a a sell for boost promotional marketing how game Red be just game holiday kind I'm holidays? during a strength thank curious, just gifted Thanks. quarter. wondering shopping the could rest of strong given could the the of

Strauss H. Zelnick

specific that you Rockstar. the an be More ongoing of would be given by expect we'll very can think details I on obviously title basis. supportive

Operator

Our next with Please Ryan with question Gee from comes proceed your Barclays. question

Ryan Gee

question. afternoon. the for taking Good Hi. Thanks Yes.

to-date. just the compares rough billion from for do new the net the up about maybe guidance somewhere If some to Red do $X.X math, billion, to we at puts So, business the in for it that last your $XXX bookings already quarter. Redemption Lainie. guidance Rockstar million Dead was that $X.X around And

it the So, gap is Should your guidance up really Rockstar we about businesses? Any GTA being you unit the that, perhaps think two of should that's sales, or online that really would by of there we a catalog rest primarily Rockstar how could be made great. think products? the color in or give

Lainie Goldstein

what are retail would and sales, total referring and you're physical. our So, for what our just be digital would (XX:XX) be sell-through to our sales not

XKXX. But expectations NBA outlook XKXX Red think So, due and those is if offset numbers full that aren't sales QX you higher then comparative. and for just and X about and Dead WWE to year, RTFs increased unit lifted on in the general, we've Redemption the for partially NBA, reduced by

Operator

proceed comes question Please with Eric from MKM your Handler with Partners. next Our question.

Eric O. Handler

you the how the might versus things And very about A about the as of when two think first game, between give when question. you the little might dispersion you a if Dead, and also, in wondered other there. and that I premium Red can Lainie, you how you did the about progress base much you on Online think if possibly the Thank then, of the insight online Yes. know, how ramped Dead? SKUs. game GTA you it portion with some you can Red Wondering maybe particular, started and talk talk couple in for SKU similarities

Strauss H. Zelnick

have don't the Strauss. how it's break editions Hey, different down we No, Eric, sold.

will It in yet. making current talk any will about about month. Dead details, to Rockstar We don't launched down will it's tend but not but some beta more too towards launch Red the Redemption break to early X a lot we of break end to Online, the we're that way have say down. And it, predictions. hasn't public

Eric O. Handler

one guess Fair just downloads full then, – I physical Wondered in Dead terms Red quick enough. not sure of or I'm versus if I it game follow-up. And missed did sales? but how not,

Lainie Goldstein

a seen Eric, higher physical did already the giving title, detail we of expected. originally not We're say proportion sales but had digital we have we than versus by that

full current-gen we year, gave the last year, time. up XX%, game for downloads expecting to and when last full to we're be on expected XX% our we it had XX% our be So, from guidance

Eric O. Handler

Thank Understood. much. you very

Operator

your question proceed next from Justin with Lynch. Post Our Please comes with question. Merrill

Justin Post

you, (XX:XX:XX) Dead. a RCS related then, software that the why of can forecast the have for million capitalized the to flow Red but be Maybe you on dynamics below to that's income Thank through And congrats you about side. Great. will your may short-term quarters? on Lainie, the sheet. Wondering units about bit long-term Red you. related Dead. of I how talk next and few higher? the $XXX little not statement driving And think balance that's imagine I in Thank then, some that NBA,

Karl Slatoff

Karl. Justin. Hi, It's

Just about down versus units your question modestly units this XXXX. first at forecast point, to-date, dynamics the so, are of yeah, the to the of XKXX address NBA

So, a we're bit them forecasting down the for full year. little

are XK increase could of there sales units in out of XKXX. but dynamics competitive to of answers now, kind bought to pursue title. have but over certainly And seen continue have the higher be yet, be of an titles why ever with You that NBA the as a XKXX, of engaged unit don't of consumers to number there. which that lot converted There's on case, they exact XKXX who some could market a also that's haven't the we NBA have number effect strategies to continues the affecting

So, not terms it right. are But we're down. you're engaged. Consumers more much taking obviously RCS, of in sitting

are how been the in to just on all good Visual is And here think much metrics and much – that credit title year-upon-year. title, they in I you past. the better how engaging that that is improved had just title the key shows than are Concepts' the the consumers news actually

Lainie Goldstein

long-term, software game Red for the So, cap see Redemption into for move we short-term wouldn't Dead until releases.

So, see once a won't our title. title. $XXX you longer through determine of can reporting, And life. management period lifetime life that and you'll includes million share a And the don't be has is And that of but we'll that a And you the wouldn't to until expense release title number, will movement the a of you that amortization the go QX. creating estimate game, help a see our we imagine only we estimates, GAAP of capitalized through go stock that blockbuster the what bit that over lifetime reporting. our

Justin Post

Great. Thank you.

Operator

Macquarie question. Schachter with Please your proceed comes with next from question Our Ben Group.

Benjamin Schachter

years? software guys. for too Hey, I'm Is is launch, on spending this of the monetizing chasing amortization, bit it's can really talk about the be and On long, about bear. a a the for of one, line it little sales? the it's it just just more of probably personally where sales, years? then, than or Dead experience Online that is what of great two capitalized believe, when we Congratulations terms on opportunity, thinking you done you well, And part. Online grow? guide? year where was international to Lainie, you And you relative it time in much there? Dead talked straight means Thanks. a And Red one the would've XXXX, as done in more FY success listed it could as Can to not you're it the magnitude and liked for clarify then second capitalized If Red think three a well How year's I this you contributor so about separately, going would GTA you assume obviously, it's the be where script. legendary that

Strauss H. Zelnick

the before is I'm truth. for he into questions. So, was game. like the you your and went – thanks meeting actually We're this That playing Karl's office I glad right it.

international here. beloved the around not question. terms strong third everywhere. in will breaking year. the take It's Lainie well we're it's great And selling doing online, And Dead So, the out Red in incredibly It's already Online of for very It's markets. very, world.

Lainie Goldstein

Sure.

stream. it would be did one unusual we I assume It's we would So, titles be it longer you would really have than of all – (XX:XX:XX) higher it look at at the revenue yes, And would have wouldn't the more and blockbuster, and our straight of that. titles look matter true. long definitely life titles we life how be a that from the And similar on it's would GTA of but be it the lifetime, based a it launch to if terms just would go over in revenue probably history determine GTA would of circumstance. assume the that quantity, line. year, would over the of amortize, a is our and all to But stream.

Benjamin Schachter

quick just then, And a Great. follow-up.

revenue. So, talking you Online about when you did say were Red Dead

So, should we assume that and Online that's ,that Dead means there is monetization in Red of guide? part the

Lainie Goldstein

Red about say Red Dead, about Online. talking Dead Dead. was of didn't the I I Red launch

Benjamin Schachter

Thanks. Okay.

Okay.

Operator

with comes Stanley. Morgan Brian Please question. your from proceed with next Nowak Our question

Brian Nowak

questions. for Thanks taking two. have Great. I my

put next the Strauss, you've sort recurring a the of more to out ability and potential engineers stable Thanks. put back, with up years? Social done an can you of you games are about capacity? How do development of of Any great most more second The And mobile titles us? mentioned you a software first basis to one, years Point. one, XX all just and of job far new three, building on timing couple the annual last are think you content. the about? you excited thoughts in now sort step at Where on out two, as genres four share as the you Which

Strauss H. Zelnick

really So thanks and said collection we've of is that advantage a for upcoming extraordinary goal have those to regarding our question. frontline our handful in years release powerful schedule, franchises. any taking would our releases of your of be And

have XX released. have We that million one X franchises at each least unit had

an at individual units in sold over We release. have have XX X million least that

create beloved will new well. we to we intellectual and aim year as So to property bring certainly market back franchises every

market been which or to exceedingly looks titles the like high-quality an titles haven't annualizing to doing, in too able so that, bringing always without really lot We trying awful but difficult really frequently, that is think goal. do we you're in asking do. should market. non-sports much over bringing development to program of have to title our too either frontline We terms think powerful or again that do without right, the from teams and if able be a consumers able over to we high-quality to an our bring titles incredibly to that's And release

titles other really the on sports Our well. annualized. They hand are worked entertainment

that's So you what forward. I going expect think should

was question are to they're regard The to mid-core. second of as Point. engaging, sort Social deeper, games intended and be deeper they're The They're with engaging. described

Point releases that is of that from important it's because speak for talk a upcoming have of developing what diverse expected and about Beyond marketplace it's view excited But themselves in come. their Social to we're will about titles the We're that of our competitive. and they that, are thrilled the highly marketing. array hits label point to be

Brian Nowak

Great. Thanks.

Operator

question. Evan with Please next KeyBanc. with Wingren from question proceed Our your comes

Evan Wingren

you. Thank

the wanted RCS Just about quickly for ask outlook XQ. to

understand and mentioned was that in a with you launch just confused. think to it your XK given dynamic. so I respect because The that that you year takes, still that Heist last was growing, to later and flat. to Respecting GTA, comment the cannibalization, trying did just the expect puts crystal quarter trying Doomsday understand I bit And NBA comment don't clear, is that to then a just actually little Strauss's for be

guide You're saying there Red is Online. nothing in Thanks. for the Dead

Lainie Goldstein

I talking product X of software, No, was full released. we Dead the We've the anything was didn't game Redemption I talking was already said capitalized the there of just in amortization the guidance. core when about Red about and that wasn't say that

up that terms year talking going spending, For recurrent be XK the for is full full of what the NBA to we're is about in consumer year.

We time have some that's launch Dead and this Redemption X will month. later Red

it each GTA for number offset which guidance And QX say we significantly. every and we is was original title for QX. full And by did have also for down out year And up for given it a be the so and won't so, time quarter, comes Online be like beats full And won't the our that's the quarter. to reduced. why out Online, GTA it expectations

Evan Wingren

for reviewed it NBA then a that year, Thank and title, your expectations last one slightly? relative has you. to Give Okay. XK. just of sense so well sort was the this Thanks why quick one given on underperformed

Karl Slatoff

got grow base longer focused the could Yeah, period a revenue array title We We've more on audience be can a earlier title at our the we question, time at where it in of them is said, say Hi. is of a games high a vast transitioned And obviously as below our engaged it. that going ever. not point a reasons. are market. XK perspective, There point. in in expectations the this little an trying as this that has to people bit time. the be we like not to from I XKXX said and But over. for lot expected be as have lot a I underperformed still to highest may possibly in this Actually, are units be anticipate did bring

Evan Wingren

the for Thanks clarification.

Operator

Juenger Todd Our your from with comes proceed next Please with Bernstein. question Sanford question.

Todd Michael Juenger

I NBA point, taking but to just do about is number? Hi, right. I with driving broadly, any more said more thanks it think heard do a in it's more the Is change overlap had helpful. that number. I big consumers? game X-X%, But players what right, timing of know a a such heard Was very there XX%, it question. obviously that for correctly. the some At ARPU. XK can this not the want be detail it to recurring Any revenue. sure Is concept rate, increase I a accepted Thanks. lot I bit guess that design? go drove understand if I to previous ones, thought Trying heard hard back that would issues? If I what to it in there some you by the with you I that's evolution higher being attach the make change to more result generally behavior? game just about heard I in

Strauss H. Zelnick

market and Visual lot what reflective consumer Concepts think year's last that who avid the and You voting that a up result they're consumers. to increased spending are love love of we are engagement, They game And quarter. consumers they and is is recurrent hear XX% bringing inside it right, more it's engagement, over did it. is the the great

consumer know spending, of That's recurrent kind this answer. year you engagement. of see So we'd reflective I captivating, in when like to goal. give our more a Lord better, approach to you And the every could I can that better deeper, obviously I it wish too. confirm that change more game is make entertaining, the more is knows, engaging.

Todd Michael Juenger

you. Thank

Operator

question next Research. from Please comes Our your with Consumer with Stochel proceed question. Ray Edge

Raymond L. Stochel

questions. my taking for Thanks Great.

couple on Rockstar. Red a Redemption here So, and X Dead

Rockstar a current be, Club thing expectations? review know just big as Would that we been position, would in cash Club Dead first in how could any and And can the the changes there you now context? it's addition then, of successful? with not general think about Social competitive your Club, any you're you reception? to your Redemption about one the points sort you customer of scores driver think you bigger success to that key Dead's advantage? on that, have do Red of game sort the or are thinking whether be If X through relative So, that any Then, Red of a Thanks. broadly, launch about or preorders is Social great? way And guys or Rockstar's be you data that'd Social isolate

Strauss H. Zelnick

flow cash the our over We be of cash year and position, terms we successful cash expect end billion will $XX million. that have expect of to a little expected, $X at be, quarter. will over announced the as we affecting operations in have this $XXX that we So, million around that adjusted CapEx from

are, you that's balance our first, our expectations is an cash do organic growth basis. by That's to a a been expect company story. really We driven with year have support can that the organic math. at cash on obviously ongoing growth end. This to We've significant said our So, our to largely. regard

Secondly, for $XXX XX a to not obviously observe very to are to that narrow Point, We're want having a great it's And find significant think debt. that a and know when it if quickly. us growth it's we beneficial. last of change, shareholders. back riding for our will company. the with I do about we're million concerns support place We of bought return point but then, uses know does around like Those of the course, immediately, we look capital well-positioned inorganic do of would we we a months don't in matter a prepared the And changes, or I quarter-to-quarter through us. And and to when so. cash, stock not to for deal three the cash very Social then accretive, want of lens though. many opportunities no We to be have if be that example, us growth. opportunities, it to purchase that some great long-term economy, at feel strategically high be is asset you we

the to for you Take-Two Theft if event be consumers the creation that good make think, that as I became asked Games, would Red Auto business. demonstrated the X think what think answer for think success the game drives threshold that did, they of the industry, results. thing, ground item. a which Redemption Rockstar is next-generation Rockstar up first And And Redemption of whole, can because something second enormous known is by have I the became it I Grand from the in Dead that So, Red the basically for And is built Dead when best a I V, that you the to which Rockstar, for must-have X. really games so the amazing a understood, breathtaking as be has

X, Red you it's and score, Dead and ties games Metacritic be great. to it's home, must-have great. item you promise you a V, something basically says I if will Auto video Theft got And play Grand XX is get it's And great. when it play Now, that with it agree, you you Redemption

in do Social passionate With think not any and that, but phenomenal somewhat have just Rockstar It give it of lots it and detail sure of the So, it's lots amazing continuously. as to a We anticipated engaged. people a don't how what anyone community. the beneficial more as usually and that has release. Club, label were way, and interesting unexpected hit could vibrant for than are much drives expectations regard I'm phenomenal is. this high asset. is it's the strategically The who success supports we it's

Operator

Please with from question. Mike Benchmark comes with proceed The your Company. next question Our Hickey

Mike Hickey

is Red (XX:XX:XX) competitive an and play a I stretch. said. to amazing Lainie, success. this and on that's Dead Hey, quarter, a what Online, think Hank, bit well, Dead elements on at there's awesome truly Curious Strauss, of congrats congrats game on Obviously, you as guys, Red Karl, least the it, Rockstar

time? You've the sports to hard that in speaking, over that but what any eSports this player, for it's And by guess they seen nailed you think on that is ambition more thinking a nailed I broadly to Rockstar service read market obviously, opportunity single at all compete do get philosophically, have game. (XX:XX:XX)

Strauss H. Zelnick

I think there Rockstar eSports interest, it. an will talk if is about

with labels we in far, XK NBA to NBA XK the around ambitions front want would I always, and centered out so announcements. eSports League. our as think marketing have observe that Take-Two's I be

Mike Hickey

units channel the like Okay. said obviously? last from sold-in. on looks million And you what perspective Any side, physical the Cool. one me, XX on

Strauss H. Zelnick

It's selling rapidly.

Mike Hickey

guys. Thanks, that Well, Good it sounds right. with luck like. (XX:XX:XX). All

Operator

question next Ross comes Brandon proceed. BTIG. Please from Our with

Brandon Ross

taking Thanks questions. for Hi. the

that of to XK Just coming. games And you a businesses kind allocation accretive? or on adjacent now on if what there follow-up on, that there Are in out opportunities question Thanks. well-integrated? those are earlier. see for gaming within within ideal this Social based called are Point, Point's opportunities titles whether make Point And Maybe opportunities quarter mid-core on Rockstar you guess, in your number any success IP can be from past M&A capital them make seem mobile is bulking and you sense I the Rockstar obvious us Social Social of being up gaming, ways XK other then working the would or or console. you any guys? might with that besides update strategic

Strauss H. Zelnick

I that acquisition said to even of because We've the least There's create potentially their so just is property. we thankfully, I it it second they're unusual property, our And bring the be here all far very to note brought yeah, wouldn't so made at of better. inside Doesn't all good possibility is absence a it teams at Thanks don't wouldn't believe approach as the all. done And owned working of to with label another their The that isn't your focus And be. the card in us our three. many said, thinking the They primary the accretive, that but succeeded. of doubt want of biggest and focus things it things. relevant Point you question own in have about precedence and a approach in family, approach. Point, around not, rule out like It of I would all Social Generally, or what should for have we've no Take-Two achieve. relatively an we've SuperCard intellectual but brought to the bring great selective. that success successes that's three in intellectual whole To done you ones bunch you acquisitions that but platform, the keep would metric, for of we the Point And native a at are business. indeed Most is with what And that that WWE native. one Social that, terms be your really know acquisitions to at Social are two we've had as to of know of look property platform. trying shouldn't about being titles a corporate all three, be look you'd us is of labels questions. acquisitions example, that's intellectual huge fail. three We'd is our to were mobile, mobile. way. really three, technology.

Brandon Ross

you. Thank

Operator

next with comes Please question. your from with Stifel. question Our Drew proceed Crum

Drew Crum

Good guys. Hi, afternoon. Thanks. Okay.

frequency can if but apologize X should missed updates was think the Dead updated Online to Dead So, think of between the GTA PC. down separately, Red expect then on stagger X Dead I Online? making PC Thanks. I talk an And thoughts there question, will the schedule Any response was content Dead And Rockstar road? about whether I we not you for available question on Red on -and earlier I X the Red Red Online. release and on the

Strauss H. Zelnick

could the you repeat Sorry, question? third just

Drew Crum

X just on Strauss, on Yeah, available making PC. Dead Red

Strauss H. Zelnick

intentions it's Red would that available talk it true Rockstar, Online have we'd and answer would Historically, updated Rockstar regard obviously, for our update content because to products content obviously. And for questions. in hold offerings. early going forward of of So, on on all hasn't on about everyone to talk we same releases platform. their about are ongoing of making PC? sort too releases, all normally yet, and But launched that online what for will X upcoming your terms upcoming with it the Dead updates On

instance, too you So, apologies. really I this particular in can't give clarity, much

Drew Crum

Okay. Thanks, guys.

Operator

your question. comes Our Uerkwitz Please Oppenheimer. with from next with question Andrew proceed

Andrew Uerkwitz

Thank Thanks, Yeah. you. Lainie. gentlemen, and

game V of I big the all great it GTA new it came, such fact went was that a cycle One experienced the bought out again. benefits was console people when and a think

Sony and And because forward-backwards Does event, you to easily lot looks that entire NBA you Xbox medium for they on iPad a the lot for that another iPhones compatibility. become next console to to multiple enough Civilization the VI tend that XK the talk then powerful your showed the last we content Are think and and at could it is like cycle of game, mobile. I as full a devices push is too? becoming question, an change the Thanks. dynamic have Apple those Dead approach Red about years? second legs

Strauss H. Zelnick

think actually important. Yeah. I is that backwards all don't compatibility

I Red the straight that extraordinary new because remained to nothing when think the the And amazing features. content all, so meaningfully it first the was bearer great of a Auto it Grand generation title new it new for until we X generation was technically reason experience that through of creatively. the with brought because V is, Redemption we with had Theft up release Dead secondly, stood updated standard or such to the

certainly but really success So, out don't to built we our things are know, how it's hard Red by great – Redemption start. forward, control. transitions. managing defensively But of X Those not Dead a it's our platform fares off to going is

I the success are some to of we're at say that's far, event, of NBA, thrilled Our we your possibly referencing can will. for factors powerful. abilities, least is On the watch you I the every drill. And Apple participate that that smartphone. so matter thanks and title. made. whether making technical to for very about grateful like The kind that people best can is entertainment bit on appears of devices movies a by it entertainment skeptical to the as their and then think do I'm going that every appeal time question and it's point whole really built it form find before to it's just who best that the that we're mobile

powerful iPads people deep, memory-intensive, when clear, some find they robust, and play – when very can the you our be yet, enough who platforms sure they're to I'm are, in very probably time, technologically I happy there be like very So, we're not yet. intensive to are we'll but really not long a before that's platforms smartphones. on or not matter right But But do, and Moore's that if the time law, a quite now, it's believe titles just you of case.

Andrew Uerkwitz

it. very Got guys. Thank it. you much, Appreciate

Operator

Company. next question Cowen comes from Our with Doug Creutz & Please proceed the with question.

Doug Creutz

for Thanks. This Strauss. is

that's CEO with about being you. as the Take-Two? you're all Do possible internally in of of two of a kind name and other? of against how Chairman affect that, at Interim Thank doing in seen balancing important a even over each at a Has and congratulations there They're way. off facing think next one responsibilities? And decisions named lot those release there CBS both any conjunction responsibilities what – I've spot the candidate. press And recently the years, of were in been your the do kind mentioned by on you company externally. You reshuffling roles

Strauss H. Zelnick

CBS non-executive. The and interim role specifically is

convene years. committed we activity. do members, really team I'm love plenty here my it of last what head what a And I'm observed proud I'm is a XX one in I And and us it the but not my I any to to the what have is of friends company. the is a opportunity firmly X,XXX you with that Take-Two think together day a and responsibility the in be service it of team remains. this of team of seat meetings. keeps to accomplished for busy. to has where proud I'd accomplish, So, industry. and to every of Really I'm effort. grateful heart as all board singular only

for about we're of do And kind are feel that they're backed this of remains what they passionate very work the amazing pursue continuing this constantly to fantastic to that have the place here, about together. strategy choice of So, it's question more the that question. is to kind best to people But you by an does the relevant team a you'd we sure is ask when who do entertainment. job get not, want more than make a yields the how they today. much And that to about up that primary often talking results because my culture in

So, to really I'm this grateful do quite to do and committed – able to entirely and be to so. be every day continuing specific, to I'm

Doug Creutz

Thank Great. you.

Operator

time, turn to this to call back I the management comment. would At for like closing

Strauss H. Zelnick

excited release will hopes Dead Redemption Thank Just how joining obviously have want we're for appreciate to today. a us. to we your Red you And year. the guide understatement title wonderful unfold. a for again X. us say of that to We grateful really thank for we're initial for up We're the continue gross support. joining is We're to And the that for everyone able thrilled it for quarter. terrific second

Operator

This teleconference. does today's conclude

time for at your and lines disconnect thank you may You your this participation.

Take-Two Interactive Software (TTWO) 7 Nov 182019 Q2 Earnings call transcript