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Take-Two Interactive Software (TTWO) Strauss H. Zelnick on Q1 2016 Results - Earnings Call Transcript


Greetings and welcome to the Take-Two Interactive First Quarter Fiscal Year 2016 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Hank Diamond. Thank you, sir. You may begin.

Henry A. Diamond - SVP-Investor Relations & Corporate Communications

Good afternoon. Welcome and thank you for joining Take-Two's conference call to discuss its results for the first quarter of fiscal year 2016 ended June 30, 2015.

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 have no obligation to update these forward-looking statements.

Actual operating results may vary significantly from these forward-looking statements based on a variety of factors. These important factors are described in our filings with the SEC, including the company's Annual Report on Form 10-K for the fiscal year ended March 31, 2015, 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 non-GAAP. Please refer to our earnings release for a GAAP to non-GAAP reconciliation and further explanation. Our earnings release and filings with the SEC may be obtained from our website at

And now, I'll turn the call over to Strauss.

Strauss H. Zelnick - Chairman & Chief Executive Officer

Thanks, Hank. Good afternoon and thank you for joining us today.

I'm pleased to report that during the first quarter we delivered strong revenue and earnings growth, driven by robust demand for our recent releases in catalog as well as better than forecasted recurrent consumer spending. Our solid earnings converted into significant cash flow and at quarter-end, we had approximately $1.2 billion in cash and short-term investments.

Nearly two years after its record-shattering launch, Grand Theft Auto V continues to outperform expectations. On April 14, Rockstar Games brought this groundbreaking title to PC with a number of enhancements, generating stellar reviews and strong digitally delivered sales. In addition, we benefited from ongoing demand for the console versions of Grand Theft Auto V, particularly as the installed bases of PlayStation 4 and Xbox One expand.

To-date, Grand Theft Auto V has sold in more than 54 million units worldwide. And Rockstar Games is successfully driving engagement with the title and meaningful incremental profits through their release of new content for Grand Theft Auto Online, which I'll discuss shortly.

NBA 2K15 continues to broaden its global audience and build on the franchise's trend of annual growth. Sell-in of the title has crossed the 7 million unit mark and surpassed NBA 2K14 during the same period after launch. And NBA 2K15 has generated substantial revenue growth over last year's release, driven in part by high-margin recurrent consumer spending. Our first quarter results were also enhanced by a diverse array of other recent releases in catalog titles. Standouts include the Borderlands series, particularly The Handsome Collection, WWE 2K15 and Evolve.