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Take-Two Interactive Software, Inc. (TTWO)
Q3 2018 Results Earnings Conference Call
February 07, 2018, 04:30 PM ET
Henry Diamond - SVP, IR and Corporate Communications
Strauss Zelnick - Chairman and CEO
Karl Slatoff - President
Lainie Goldstein - CFO
Eric Handler - MKM Partners
Chris Merwin - Goldman Sachs
Justin Post - Merrill Lynch
Ryan Gee - Barclays
Mike Olson - Piper Jaffray
Brian Nowak - Morgan Stanley
Ben Schachter - the Macquarie Group
Ray Stochel - Consumer Edge Research
Mike Hickey - The Benchmark Company
Evan Wingren - KeyBanc
Tim O'Shea - Jefferies
Doug Creutz - Cowen & Company
Drew Crum - Stifel
Brandon Ross - BTIG
Andrew Uerkwitz - Oppenheimer
Greetings and welcome to the Take-Two Q3 Fiscal Year 2018 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.
Previous Statements by TTWO
» Take-Two Interactive Software (TTWO) Q2 2018 Results - Earnings Call Transcript
» Take-Two Interactive Software (TTWO) Q1 2018 Results - Earnings Call Transcript
» Take-Two Interactive Software' (TTWO) CEO Strauss Zelnick on Q4 2017 Results - Earnings Call Transcript
» Take-Two Interactive Software (TTWO) Q3 2017 Results - Earnings Call Transcript
Good afternoon. Welcome and thank you for joining Take-Two's conference call to discuss its results for the third quarter of fiscal year 2018 ended December 31, 2017. 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 the 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've no obligation to update these forward-looking statements.
Actual operating results may vary significantly from the 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, all numbers we will be discussing today are GAAP. And unless otherwise stated, all comparisons are year-over-year. Our press release and filings with the SEC may be obtained from our website at www.take2games.com.
And now, I'll turn the call over to Strauss.
Thanks Hank. Good afternoon and thank you for joining us today.
I'm pleased to report that during the holiday quarter, Take-Two benefitted from high consumer demand for our offerings, enabling our company to deliver both strong net bookings and net cash provided by operating activities.
Excuse me, our results were highlighted by record recurrent consumer spending on Grand Theft Auto Online and NBA 2K18, robust ongoing sales of Grand Theft Auto V and the successful launch of WWE 2K 18. As a result of our outstanding third quarter performance and increased fourth-quarter forecast, we've raised our fiscal 2018 outlook for net bookings.
2017 was the best year yet for Grand Theft Auto Online capped off by an epic December that saw more players in the game than ever before. During the fiscal third quarter, Grand Theft Auto Online substantially exceeded our expectations and remain the single largest contributor to consumer spending.
Rockstar Games has driven sustained engagement through the ongoing release of a rich array of premium content led by the massive doomsday hike which is the biggest update for Grand Theft Auto Online to date, as well as rest of surprised 2017, special Halloween content and additional themed content for smart.
Also Rockstar games released the Criminal Enterprise Starter pack which gives players the access to a wide range of the most exciting and popular additions to Grand Theft Auto Online plus $1 million in GTA Virtual Currency. Rockstar games will continue to support Grand Theft Auto Online with more new content going forward.
Although it was launched over four years ago during 2017, Grand Theft Auto Online V was the number three selling game in units and number six selling game in revenue based on combined U.S. digital and physical sales across the PC, console and portable according to the NPD Group.
The title remains the must have videogame especially of the installed base of current generation consoles continues to grow and is now sold in more than 90 million units. The unparalleled longevity and success of Grand Theft Auto V and Grand Theft Auto Online is a testament to Rockstar games' ability to deliver entertainment experience that sets new creative benchmark and appeal for a broad range of audiences around the world.
Turning to our annual sports releases, NBA 2K18 delivered better than expected net bookings during the holiday quarter. The total is sold in over eight million units to date up nearly 25% over the prior year's release and digitally delivered sales have increased significantly.
NBA 2K18 was the second highest selling game of 2017, both in revenue units based on combined U.S. digital and physical sales across PC, console and portable, according to the NPD Group.
Our NBA 2K series also continues to benefit from growth in engagement and recurrent consumer spending. To date, total users and average daily users of NBA 2K 18 are current generation platforms are up more than 20% over last year and during the third quarter, recurrent consumer spending and NBA 2K grew 33%.
We expect NBA 2K 18 to become our most successful sports title ever, both in terms of units sold and recurrent consumer spending. Even with its tremendous success, we believe there remains a substantial worldwide growth opportunity for NBA 2K.