Greetings and welcome to the Take-Two Second Quarter Fiscal Year 2022 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded..

It is now my pleasure to introduce your host, Nicole Shevins. Thank you. Nicole, you may begin. .

Good afternoon. Thank you for joining our conference call to discuss our results for the second quarter of fiscal year 2022 ended September 30, 2021..

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. Actual operating results may vary significantly from these forward-looking statements based on a variety of factors.

These important factors are described in our filings with the SEC, including the company's most recent annual report on Form 10-K and quarterly report on Form 10-Q, including the risks summarized in the section entitled Risk Factors..

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

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

Our press release also contains a reconciliation of any non-GAAP financial measure to the most comparable GAAP measure. 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 take2games.com..

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

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

I'm pleased to report that we delivered another outstanding quarter, highlighted by net bookings of $985 million, which greatly exceeded our expectations and increased 3% over last year.

We experienced consistently strong engagement trends across our key franchises, underscoring the durability of our offerings and the deep relationships that we've established with new, existing and returning players.

We believe that we can maintain these favorable engagement patterns as we continue to deliver the highest quality entertainment experiences that are driven by our team's passion and commitment to creativity and innovation..

We've been taking key actions to execute on our long-term strategic vision. We continue to enhance and diversify our pipeline across an array of platforms, business models and genres.

To support this, we're investing in our infrastructure and making key hires, ranging from senior talent at our labels, to the addition of more than 350 new developers during the second quarter. We're pleased with the progress of T2 Mobile Games, which is helping us leverage our team's expertise across our enterprise.

Additionally, Nordeus has already reached key integration milestones. We continue to build upon our ESG efforts, and we hope to share more in the coming months..

Given our strong confidence in our company, we opportunistically repurchased 1.26 million shares of our stock during the second quarter for approximately $200 million with an average share price of $158.67. This marks the first time in over 2 years that we repurchased our stock, underscoring the deep value that we observed in our share price.

In November, our Board of Directors authorized an additional 7.4 million shares that the company is permitted to repurchase, resulting in 10 million shares remaining available for repurchase as of the date of the additional authorization..

Turning to our second quarter results. Our better-than-expected performance was driven primarily by Borderlands 3, NBA 2K and Grand Theft Auto V and Grand Theft Auto Online..

On September 10, 2K and Visual Concepts successfully launched NBA 2K22, with more players hitting the digital hard court in its first month than any prior release of the game. The title enjoyed outstanding initial success with over 5 million units sold-in to date.

Players are deeply engaged and we're experiencing growth in daily active users and daily games played per user compared to NBA 2K21 in the same period..

For the quarter, the NBA 2K series delivered exceptional results that were significantly above our expectations. NBA 2K22 experienced growth in recurrent consumer spending as well as a 4% increase in total in-game purchasers and a 58% increase in new user spending.

I'd like to congratulate the teams at 2K and Visual Concepts for once again delivering such a stellar basketball experience. We see a meaningful opportunity to grow the franchise further over the next few years as we provide engaging and frequent content updates throughout the game..

Sales of Grand Theft Auto V continue to exceed our expectations. And to date, the title has sold-in more than 155 million units worldwide..

During the period, Rockstar Games launched another major update for Grand Theft Auto Online's evolving world.

The Los Santos Tuners update brought a renewed focus to the underground street racing scene and introduced a host of innovative and highly requested features, including the LS Car Meet, a shared social space where players can get together to modify, test and race their cars, get tattoos and more.

Los Santos Tuners also added 17 highly customizable vehicles, a purchasable auto workshop, new robbery contracts and street races and the ability to add music in a new way through collectible media sticks..

Recurrent consumer spending increased 33% and active player audience increased 11%, representing the strongest second quarter on record for both metrics.

The success of Los Santos Tuners demonstrates Rockstar's ability both to anticipate the needs of its players and to respond to player feedback with an ongoing stream of high quality and engaging content..

During the quarter, Red Dead Redemption 2 also significantly outperformed our expectations and to date has sold-in more than 39 million units worldwide..

Momentum continued in Red Dead Online with the introduction of the Blood Money update in July, which introduced a series of new criminal-themed opportunities; complex new missions, including the game's first train robbery; and The Quick Draw Club, a series of 4 distinct, rapid-fire passes featuring criminal-themed unlockable rewards, bonuses and more.

As a result of the Blood Money update as well as the influx of new players attributable to the stand-alone version of Red Dead Online, we experienced a 26% increase in active players and a 29% increase in new online player acquisition. Recurrent consumer spending for the series was also notably above expectations..

In August, Private Division expanded their portfolio with the physical release of Hades for PlayStation and Xbox platforms. The title continues to earn positive praise from the gaming community and is currently Metacritic's highest rated game for the PlayStation 5 and Xbox Series X.

In September, the label released Murder on Eridanos, the final expansion for The Outer Worlds for the Nintendo Switch. We're pleased that The Outer Worlds continues to grow its audience. And to date, the title has sold-in over 4 million units.

Also in September, Private Division launched Kerbal Space Program Enhanced Edition for Gen 9 consoles, taking advantage of the latest performance and the visual enhancements to provide players an exciting new way to experience this beloved space flight simulation game..

During the quarter, recurrent consumer spending rose 7%, which was significantly ahead of our expectations of an 11% decline and accounted for 69% of net bookings. As I mentioned earlier, our consumer engagement trends were consistently strong even as people resume more normal socialization patterns and as schools and workplaces began to reopen.

We're very optimistic about our continued ability to keep players engaged and to capitalize further on our massive audience size..

For the period, NBA 2K and Grand Theft Auto Online were the largest contributors to recurrent consumer spending. Many of our free-to-play offerings were also notable drivers. Top Eleven exceeded our expectations driven by strong seasonal live ops and features, optimized marketing activities and enhanced user quality.

Dragon City and Monster Legends performed well, thanks to strong live ops, new updates and feature releases and increased marketing investments. Two Dots achieved its highest ever net bookings since our acquisition, which we attribute to new in-game events such as scavenger hunts and curated seasonal content.

WWE SuperCard has now been downloaded more than 24 million times and remains 2K's highest grossing mobile game..

NBA 2K Online in China outperformed our expectations and remains the #1 online PC sports game in the region with nearly 55 million registered users. We continue to monitor the regulatory environment. It bears noting that China represents 3% of our net bookings in fiscal '21.

While we remain optimistic about China and we'll pursue further opportunity there, we believe that our exposure to the region will remain limited in the context of our growing overall net bookings..

Turning to our guidance. As a result of our second quarter outperformance, along with our updated forecast for the balance of the year, we're raising our outlook for fiscal year 2022, and we now expect to achieve net bookings of $3.3 billion to $3.4 billion. Lainie will provide more details shortly..

With the strongest multiyear pipeline in our company's history, we continue to believe that we'll achieve sequential growth in net bookings in fiscal '23 and establish new records of operating results over the next few years..

Our focus on bringing new intellectual properties to market will help us diversify our portfolio further and build lasting franchises that we believe will enhance our financial profile for years to come. At the same time, our teams are hard at work developing sequels to many of our beloved franchises that we know our consumers will be eager to play..

As we execute on our strategic vision and maintain our commitment to an outstanding and collaborative culture, we believe that we will significantly grow our operations and drive long-term shareholder value..

I'll now turn the call over to Karl. .

Thanks, Strauss..

I'd like to thank our teams for all their contributions as well as their continued passion and dedication to our business. Our unique and collaborative culture continues to be a key driver of our success..

Definitive Edition for Stadia. Previously released on other platforms, the Definitive Edition offers many additional features and post-launch content that has since been incorporated into the game. We're pleased to continue our support for Stadia and expand the Mafia franchise to new audiences..

On October 11, Nordeus released Top Eleven 2022 on iOS and Android, the latest installment of the world's most successful soccer management game. Top Eleven 2022 delivers a significant update to the gameplay and soccer management experience, pitting aspiring soccer managers against one another in league, cup and friendly matches.

Top Eleven 2022 also provides a significant new layer of depth to player development via the Playstyles feature, which helps to enhance the soccer fantasy that Top Eleven has been providing to fans for more than a decade..

On October 14, 2K and HB Studios launched the PGA TOUR 2K21 Baller Edition, which includes the base game, all previously released DLC courses and game modes, an assortment of adidas apparel and gear and the Golden Touch Pack that features a gold putter and driver.

In addition, PGA TOUR 2K21 offers new multiplayer courses each month designed by a group of international content creators. We're thrilled that the community continues to grow with the title selling-in over 2.5 million units to date..

On October 19, 2K launched NBA 2K22 Arcade Edition for Apple Arcade, building on the success of its predecessor, which continues to be listed as one of the platform's top games with an average of 4.6 out of 5 stars across more than 85,000 ratings.

NBA 2K22 Arcade Edition expands the franchise's addressable market with new modes and features, including The Association, MyCOURT and more..

Rockstar Games continue to provide an array of free content for their vast and growing online communities.

To celebrate Halloween, Grand Theft Auto Online added a series of random events to shock and surprise players, including driverless phantom killer cars, superhuman slashers, UFOs and more, including bonuses on Alien Survival modes and a new Arcade game.

Players will also be able to experience an all-new adventure in the Grand Theft Auto Online later this year as they help some well-known contacts and familiar faces with many more surprises yet to be revealed..

The Trilogy — The Definitive Edition will launch physically for consoles on December 7 and will release for iOS and Android devices in the first half of calendar 2022.

As part of the celebration of the recent 20th anniversary, Grand Theft Auto III fans can also collect an array of special commemorative gear in Grand Theft Auto Online throughout a series of upcoming events this fall..

On November 12, 2K and Gearbox Software will release limited quantities of Borderlands 3 Ultimate Edition physically for PlayStation 5 and Xbox Series X.

Avid Vault Hunters and newcomers alike are sure to enjoy this quintessential Borderlands 3 experience, featuring the award-winning base game, plus all 6 content add-ons and the full collection of bonus cosmetic packs.

The Ultimate Edition is optimized to take full advantage of the Gen 9 hardware's processing power, enabling gameplay at up to 60 frames per second in 4K resolution during single player and online co-op..

OlliOlli World, the skateboarding action-platformer developed by Roll7, launches this winter in the fourth quarter of fiscal 2022 on PlayStation 4 and 5, Xbox One, Xbox Series X and S, PC and Nintendo Switch..

On March 25, 2K and Gearbox Software will launch an exciting new entry from the Borderlands universe, Tiny Tina's Wonderlands. In September, the team unveiled the game's brand-new mechanics and all-star celebrity cast, including Will Arnett, Ashly Burch, Andy Samberg and Wanda Sykes.

Fans' reactions to the first look at the gameplay was extremely positive, reflecting the growing excitement for this fantasy-fueled take on the popular looter-shooter genre..

In addition, 2K and Visual Concepts remain hard at work on WWE 2K22, which will be released in March. Our partners at WWE have done amazing things with their brand, resulting in a passionate and deeply engaged community.

And they're providing tremendous support to maximize our campaign through all their platforms, including social media, digital, programming, talent, in-arena and more. Visual Concepts is gearing up for a major reveal of the game's key features in January, which we look forward to sharing with fans, followed by the biggest WWE 2K launch to date..

Rockstar Games is thrilled to launch the expanded and enhanced versions of Grand Theft Auto V and Grand Theft Auto Online – Standalone for Gen 9 consoles in March.

Players will enjoy a range of technical and graphical improvements across the entire experience, including performance enhancements for select vehicles in Grand Theft Auto Online and much more. Rockstar Games will have more details to share about these eagerly anticipated launches in the coming months..

As we noted in our earnings release, Marvel's Midnight Suns from Firaxis Games is now expected to be released in the second half of calendar 2022 during our fiscal year 2023.

While we don't take delays lightly, we know that our proven success has been rooted firmly in our player-first approach and unwavering commitment to delivering the highest quality entertainment experiences.

We believe it is far better to provide the extra time needed for a product, especially a new IP, to reach its full potential and drive long-term success as a permanent franchise in our industry-leading portfolio.

As gaming platforms continue to evolve, technological advancements allow us to design experiences that are more immersive and engaging than ever before. While this has enabled us to significantly grow our franchises over time, game development has become more complex, especially with many of our colleagues still working remotely..

We continue to evaluate and optimize our game creation processes to enhance the ways that our teams collaborate, share best practices and leverage technology and expertise..

Turning to eSports. The NBA 2K League concluded its fourth season, attracting more than 18 million unique viewers and over 2 million hours of games watched on Twitch. During the playoffs and finals, nearly 4 million unique viewers tuned in as Wizards District Gaming won their second consecutive championship.

In addition, the League hosted their inaugural All-Star Game held at Brooklyn Steel in New York. As part of the League's continued global expansion, Mexico's DUX Gaming will launch a team this spring, marking the 24th team and the first to participate from Latin America.

We are thrilled to see the League continue to grow both its audience and global presence..

In closing, we have a strong foundation for success that has helped us curate a portfolio of highly engaging franchises that transcend console and player generations.

As we continue to harness and enhance our competitive advantages, our incredible creative talent, best-in-class marketing and technology and strong balance sheet, we will introduce new entertainment experiences that we believe have vast commercial potential and the ability to drive long-term engagement and recurrent consumer spending.

We also expect to continue to attract the very best creators who share in our vision to set new benchmarks and captivate audiences throughout the world..

I'll now turn the call over to Lainie. .

Thanks, Karl, and good afternoon, everyone..

Today, I'll discuss our second quarter results and then review our financial outlook for fiscal year 2022 and the third quarter. Please note that additional details regarding our actual results and outlook are contained in our press release..

As Strauss mentioned, our business fundamentals remain exceptionally strong across our key franchises. Net bookings were $985 million, which was significantly above our guidance of $815 million to $865 million and up 3% as compared to last year.

Our outperformance was primarily driven by Borderlands 3, NBA 2K and Grand Theft Auto V and Grand Theft Auto Online. During the period, overall engagement was outstanding, with recurrent consumer spending increasing 7% compared to our outlook of an 11% decline and accounting for 69% of total net bookings.

Our outperformance was primarily driven by NBA 2K. Digitally delivered net bookings increased 9% compared to our outlook of a 5% decline and accounted for 89% of the total. This result was better than our outlook, primarily due to the outperformance of recurrent consumer spending.

During the quarter, 65% of console game sales were delivered digitally, up from 57% last year..

GAAP net revenue increased 2% to $858 million, while cost of goods sold increased 6% to $457 million. Cost of goods sold included a $53 million impairment charge related to our decision not to proceed with further development of an unannounced title in our pipeline..

Operating expenses increased by 30% to $381 million. The variance is driven by higher personnel, marketing and IT expenses; the addition of Playdots and Nordeus and the revaluation of the Nordeus earnout..

And GAAP net income was $10 million or $0.09 per share as compared to $99 million or $0.86 per share in the second quarter last year..

We ended the quarter with approximately $2.3 billion of cash and short-term investments. We repurchased 1.26 million shares of our stock during the quarter for approximately $200 million with an average share price of $158.67..

Turning to our guidance. I'll begin with our full fiscal year expectations. We are raising our net bookings outlook range to $3.3 billion to $3.4 billion.

This is up from our prior outlook of $3.2 billion to $3.3 billion due to our second quarter outperformance, along with our updated forecast for the balance of the year, which includes the move of Marvel's Midnight Suns into fiscal 2023..

The largest contributors to net bookings are expected to be NBA 2K, Grand Theft Auto Online and Grand Theft Auto V, Red Dead Redemption 2 and Red Dead Online and Borderlands 3. We expect the net bookings breakdown from our labels to be roughly 50% 2K, 40% Rockstar Games and 10% Private Division and T2 Mobile Games.

We forecast our geographic net booking split to be about 60% United States and 40% international..

We now expect recurrent consumer spending to decline by 6% compared to our prior outlook of a 9% decline versus fiscal 2021. As a percentage of net bookings, recurrent consumer spending is expected to represent 66% of total net bookings, slightly above 65% last year..

We now project digitally delivered net bookings to decrease by approximately 4% compared to our prior outlook of a 6% decline. As a percentage of our business, digital is projected to represent 90%, slightly above 89% last year. Our forecast assumes that 73% of console game sales will be delivered digitally, up from 64% last year..

We expect to generate more than $400 million in non-GAAP adjusted unrestricted operating cash flow, and we plan to deploy approximately $170 million for capital expenditures..

We're raising our GAAP net revenue outlook to $3.35 billion to $3.45 billion, while we now expect cost of goods sold to range from $1.51 billion to $1.55 billion..

Total operating expenses are expected to range from $1.47 billion to $1.49 billion, representing at the midpoint a 22% increase over the prior year.

This increase reflects costs relating to marketing, personnel, stock compensation, IT and research and development to bring our expansive multiyear pipeline to market as well as incremental expenses due to the addition of Nordeus and a full year of Playdots.

Our operating expense expectations have improved compared to our prior guidance driven by lower marketing expenses due to the movement in our release schedule..

And we expect GAAP net income to range from $320 million to $350 million or $2.75 to $3 per share. For management reporting purposes, we expect our tax rate to be 16% throughout fiscal 2022..

The Trilogy — The Definitive Edition. We project recurrent consumer spending to be up slightly compared to last year and digitally delivered net bookings to increase by approximately 5%. Our forecast assumes that 61% of console game sales will be delivered digitally, up from 56% last year..

We expect GAAP net revenue to range from $840 million to $890 million and cost of goods sold to range from $344 million to $370 million. Operating expenses are expected to range from $378 million to $388 million.

At the midpoint, this represents a 13% increase over last year, driven primarily by higher personnel, research and development and IT expenses as well as the inclusion of Nordeus. And GAAP net income is expected to range from $99 million to $111 million or $0.85 to $0.95 per share..

In closing, our second quarter results demonstrate the health of our business and our continued ability to engage our players with exciting and innovative new content. As we continue to capitalize on organic and inorganic growth opportunities, we believe that we will greatly expand our scale and deliver long-term growth for our shareholders..

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 another strong quarter. And to our shareholders, I want to express our appreciation for your continued support..

We'll now take your questions.

Operator?.

[Operator Instructions] Our first question is from Mario Lu with Barclays. .

I have one on NBA 2K and then another high-level question. So the first one on NBA 2K, I believe you guys mentioned a 58% increase in new user spending. So just curious if you could provide any additional color or specific features that was introduced in this game this year that attributed to this large increase. .

It's Karl, Mario. I wouldn't necessarily want to attribute any specific features to the increase. I don't want to tag it, but there have been certainly a lot of additions to the game that we believe have increased engagement. Specifically, just generally speaking, the game is fantastic. I mean, the reviews have been great. User feedback has been great.

Engagement has been really, really strong..

One thing to note is that we did add the seasons feature to MyPLAYER this year, which obviously creates a lot more content drops and a lot more for folks to do. Every time you increase content and deliver content, that obviously leads to increased engagement and tends to lead to increased monetization.

So it's really a combination of the game just being better. We had a lot of wind in our backs, too, from an increased player base, generally speaking. And it's just been, it's the great execution and people are really enjoying the incremental content. .

San Andreas on the Quest. Just curious what the background of this partnership was.

And do you now think either VR or building a metaverse could be growth drivers for Take-Two as a company going forward?.

We're really excited about all of our partnerships. So we have numerous partnerships. We've always said that we want to be where the consumer is.

And when VR first emerged as a potential technology, while I expressed some skepticism about it becoming a very broad-based consumer application, I also thought it was really exciting technically and said that we would participate. Rockstar has already brought L.A. Noire to VR. NBA 2K has come to VR.

I'm sure we'll have more VR titles in the future as well..

So we're always excited when our creative teams can flex their collective muscles and do different things and remains to be seen just how big that can be. We never make projections like that, but we're very excited about the opportunity. .

Our next question is from Mike Ng with Goldman Sachs. .

Trilogy on mobile, can you talk a little bit about your ambitions to create immersive core games on mobile and whether this foreshadows more mobile content in the future that may have historically been reserved for PC and console? And then second, just a housekeeping question on the improvement in guidance.

What's driving the back half improvement? Despite the push out of Marvel Midnight Suns, are there any improved expectations by franchise you'd call out?.

Mike, it's Karl. Just to answer your first question about mobile. We are obviously very excited about The Trilogy coming to mobile devices. It's actually not the first time we've had our franchises doing this. We've done this since the very beginning of our mobile days, both on the Rockstar and the 2K side.

And we have a long history of bringing our franchises to the mobile space. We've done that in various different ways. Obviously, we've brought older games onto mobile platforms. We've done companion apps, and we've brought modified games or different iterations of franchises like WWE SuperCard or NBA SuperCard..

So we are no stranger to bringing our core franchises to the mobile space. We definitely think that there's an opportunity for us to do more. Nothing to announce on the call. But look, obviously, we've invested significantly in this space, both through acquisition and also organically, and we don't expect that to stop anytime soon. .

In terms of the back half of the year and the forecast, we are seeing a lot of improvement in the forecast. We have a lot of ups and downs, mostly up, and we're netting up. The titles are looking great. Engagement is great. So we don't have any specific things to call out. But overall, the titles are doing great. .

Our next question comes from Matthew Cost with Morgan Stanley. .

I have 2. So can you just talk about your expectations over the next, call it, year or 2? Obviously, you've brought on a lot of heads. You have a lot of content in development. There's a decent amount of it hitting between now and the end of the fiscal year and then obviously more to come in the years following.

What do you guys expect at a high level in terms of like the margin impact? I would imagine there would be something along the lines of an increase in marketing as you bring games to market but then sort of benefits from scale as those heads actually produce content that is out and engaging people and monetizing actively..

Then just the second question is on China. Obviously, you quantified that at about 3% of your business and mentioned how you expect the exposure to remain limited.

Should we interpret that to mean that you don't intend to launch games in China in the future or under certain circumstances and sort of what's driving your strategy there going forward?.

So in terms of the margins in the next couple of years, as you know, this year is a big year of investment for us in terms of our headcount and our space and IT expenses and our marketing expenses. So we have been talking about that a lot, and we've seen that this year.

And next year, we'll see some annualization of a lot of those costs as we go into next year. But as we continue to build scale with our pipeline of titles over the next few years, we expect those margins to continue to grow for us. So that's our plan for the near and the future over the next couple of years. .

And in terms of China, I was making the point about the percent of our net bookings that come from China. And it's quite small, roughly 3% at the moment. We expect our net bookings to grow. We expect sequential growth. We're really excited about our future.

And at the same time, we're very focused on the region and particularly on the country in the context of what we're able to do and being compliant with regulations. So we remain highly optimistic about China. We absolutely would be very happy to launch additional and new titles there. We expect to do so. In fact, we remain optimistic.

I'm simply making the point that it is a small part of our business. .

Our next question is from Martin Yang with Oppenheimer. .

I have one. Just curious about your philosophy on remastered games.

How do you pick and choose from your pretty substantial library what games to bring back on? And as a follow-up, how does remastering games compete with resources for development of new games?.

Sure. This is Karl, Martin. I'll answer the question. I'll answer the second one. They're actually related because the truth is remastering games, unless you really go truly out to third parties, which we've done in the past, but even in that case, you are actually competing with other resources.

And therefore, that goes into your decision-making on which ones you bring to market, and it purely is an economic decision. An economic decision based on what we believe the fan base to be.

How much is it going to cost for the game to be remastered? Are we going to make other changes to the game to enhance the experience? Because typically just pure remasters without -- just ports don't really perform as well as something that's truly remastered or truly enhanced. So all of those factors go into those decisions.

But in the end, it is an economic decision. And it is a resource allocation decision, and that's just math that we do. .

Our next question is from Drew Crum with Stifel. .

Maybe a follow-up to an earlier question. Some of your peers have suggested challenges around recruiting talent, but it sounds like you've had a different experience. If I heard correctly, you added 350 developers during the quarter.

What do you attribute that to? Are labor markets improving? Is reopening helping? And if the macro picture is getting better, is your plan to accelerate new hires? And then I have a follow-up. .

Thanks for your question. Look, we're so grateful that we continue to attract the industry's top talent. In fact, we've hired over 1,500 developers over the last 2 years, and we've more than doubled our internal developer count in the last 5 years.

And I don't want to overstate the case and so much always has to be done on a daily basis regarding culture. But I do think that, that's a reflection of who we are. And I think ultimately, everyone knows who you are, people inside and people outside..

And we're really proud of the culture that we've built.

A culture that starts with creativity, innovation and efficiency, but very importantly, includes accepting everyone as they are, as they show up, as long as they are equally focused on a very high ambition for excellence and hard work, a willingness to be honest and open and transparent and collaborative, and the agreement that we have with one another that we'll treat everyone with decency and kindness.

And I think at this point, we're known for that. And we're imperfect and there's much more that we can do at any given time. We are highly focused on this culture and it has served us very well. .

And my follow-up concerns the headlines related to FIFA. Just curious around your interest in furthering your exposure to soccer beyond Top Eleven. .

We are so thrilled to have Nordeus in the Take-Two family. And they're just crushing it, which is great. Top Eleven is a great title, a beloved title. And I just couldn't be happier to be in the soccer manager business through Top Eleven with the Nordeus team. That's a big step forward for us. We haven't been in that sport before.

And I think I'll leave it at that today. .

Thank you. There are no further questions at this time. I would like to turn the floor back over to Strauss Zelnick for any closing comments. .

Well, thanks, everyone, for joining us. That was an incredibly short call for us. So you all must have better things to do for the rest of the day. We wish you very well. We're obviously really pleased with the results.

And what that leads me to say is, how grateful everyone here is to our teams who deliver these results, who work hard every day to make the phenomenal entertainment that drives the success of the company on an ongoing basis. It's incredibly hard. We don't take it for granted. We never take success for granted.

And so thank you to all of our colleagues who are listening today and the ones who aren't listening because they're hard at work. Thank you also to our shareholders for your ongoing support. .

This concludes today's call. You may disconnect your lines at this time. Thank you for your participation..