Unity Software (NYSE:U) 2025 Conference November 19, 2025 04:00 AM ET Speaker7Hey, everybody.Speaker12Hello.Speaker7Hello, there.Speaker12Ooh. To an eclipsed applause.Speaker7Yeah. Quite a muted applause, but it's fine. That's no problem. Welcome, everybody, to the pre-show. Don't worry, you're in the right place. Obviously, all of you are in the right place, but if you're watching us on the live stream, you're in the right place too. Hi, Aurora Demopolis.Speaker12Hi, Will Goldstone. How's it going today?Sp ...

Unity Software (NYSE:U) 2025 Conference November 19, 2025 04:00 AM ET Speaker1Hey, everybody.Speaker0Hello.Speaker1Hello, there.Speaker0Ooh. Can you expect an applause?Speaker1Yeah. Quite a muted applause, but it's fine. It's no problem. Welcome, everybody, to the pre-show. Don't worry, you're in the right place. Obviously, all of you are in the right place, but if you're watching us on the live stream, you're in the right place too. Hi, Aurora Demopolis.Speaker0Hi, Will Goldstone. How's it going today?Spea ...

Financial Data and Key Metrics Changes - The company reported fourth quarter net bookings of $1,580,000,000, which was at the top of the guidance range [8][27] - For fiscal year 2025, net bookings reached $5,650,000,000, also at the top of the guidance range [29] - GAAP net revenue increased by 13% to $1,580,000,000 in the fourth quarter and rose 5% to $5,630,000,000 for the fiscal year [29][30] - Operating expenses increased by 44% to $4,600,000,000 in the fourth quarter due to an impairment expense of $3,600,000,000 related to goodwill and acquired intangible assets [29][30] Business Line Data and Key Metrics Changes - NBA 2K25 sold nearly 10,000,000 units, a 7% increase compared to NBA 2K24, with engagement metrics showing significant growth [11][12] - WWE 2K25 received critical acclaim with a Metacritic score of 84 for Xbox Series X, and recurrent consumer spending grew by 20% during the quarter [13][14] - Zynga's performance was strong, with Match Factory exceeding expectations and Color Block Jam becoming a top 10 downloaded game in the US Apple App Store [18][19] Market Data and Key Metrics Changes - The mobile gaming segment remains challenging, but Zynga is noted for regularly creating new hits, with Match Factory and Color Block Jam being profitable [49][51] - The company expects recurrent consumer spending to be flat compared to fiscal 2025, representing 76% of net bookings for fiscal 2026 [31] Company Strategy and Development Direction - The company plans to release approximately 38 titles through fiscal 2028, with 13 titles expected in fiscal 2026 [22][25] - The release of Grand Theft Auto VI is anticipated to significantly enhance the company's financial profile and establish a new baseline for net bookings [21][56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming pipeline and the potential for record levels of net bookings, particularly with the release of Grand Theft Auto VI [21][35] - The company is focused on delivering value to consumers and maintaining a player-first approach [21][38] Other Important Information - The company has implemented a cost reduction program and is working on improving operational efficiency [27][29] - The direct-to-consumer business has become a significant part of the company's strategy, particularly following the acquisition of Zynga [74] Q&A Session Summary Question: Pricing strategy for Mafia - Management explained that variable pricing is a long-standing strategy aimed at delivering more value to consumers [38][39] Question: Goodwill impairment related to Zynga - Management confirmed that the impairment was a partial impairment of one of the reporting units, resulting from updated long-term expectations [40] Question: Operating margins and structural changes - Management stated there is no reason to believe operating margins cannot return to previous levels, emphasizing ongoing cost reduction efforts [44] Question: Mobile segment performance - Management acknowledged the challenges in mobile gaming but highlighted Zynga's success in creating new hits [49][51] Question: Anticipated demand for Grand Theft Auto VI - Management noted the unprecedented anticipation for Grand Theft Auto VI, supported by record trailer views and ongoing engagement with existing titles [58][90]

Financial Data and Key Metrics Changes - The company reported fourth quarter net bookings of $1,580,000,000, which was at the top of the guidance range [6][26] - GAAP net revenue increased by 13% to $1,580,000,000, while GAAP net revenue for the fiscal year rose by 5% to $5,630,000,000 [28][29] - Operating expenses increased by 44% to $4,600,000,000 due to an impairment expense of $3,600,000,000 related to goodwill and acquired intangible assets [28][29] - Recurrent consumer spending grew by 14% year over year, accounting for 77% of net bookings [27] Business Line Data and Key Metrics Changes - NBA 2K25 posted near record performance with nearly 10,000,000 units sold, a 7% increase compared to NBA 2K24 [10] - WWE 2K25 achieved a Metacritic score of 84 on Xbox Series X, with recurrent consumer spending up 20% during the quarter [12] - Zynga's Match Factory and Color Block Jam both showed strong performance, with Match Factory exceeding expectations and Color Block Jam becoming profitable within four months [16][17] Market Data and Key Metrics Changes - The mobile gaming segment remains challenging, but Zynga is noted for regularly creating new hits, with Match Factory and Color Block Jam being profitable [46][47] - The company expects recurrent consumer spending to be flat compared to fiscal 2025, representing 76% of net bookings for fiscal 2026 [30] Company Strategy and Development Direction - The company plans to release 13 titles in fiscal 2026, including major franchises like Mafia and Borderlands [21][23] - The release of Grand Theft Auto VI is anticipated to significantly enhance the company's financial profile, with expectations for record levels of net bookings [20][33] - The company is focusing on delivering value to consumers through variable pricing strategies [36][91] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming pipeline and the potential for long-term growth, particularly with the release of Grand Theft Auto VI [33][34] - The company is addressing challenges in the gaming industry and is confident in its ability to deliver results [108] Other Important Information - The company has a robust release schedule with approximately 38 titles planned through fiscal 2028 [21] - The anticipated release of Grand Theft Auto VI is expected to set a new baseline for the business [20] Q&A Session Summary Question: Discussion on Mafia's pricing strategy - Management explained that variable pricing is part of their strategy to deliver more value to consumers [36][37] Question: Goodwill impairment related to Zynga - Management confirmed that the impairment was a partial impairment of one of their units, resulting from updated long-term expectations [38] Question: Future operating margins - Management indicated that there is no reason to believe they cannot reach previous operating margin levels, despite increased development costs [42] Question: Mobile segment performance - Management acknowledged the challenges in mobile gaming but highlighted Zynga's success in creating new hits [46][48] Question: Anticipation for Grand Theft Auto VI - Management noted the record excitement for GTA VI, driven by ongoing engagement with GTA V and the success of the recent trailer [86][90] Question: Impact of console price increases - Management stated that their guidance would not be meaningfully affected by potential price increases in the gaming ecosystem [96] Question: Internal royalty line increase - Management explained that the increase in internal royalties is driven by product mix changes [103]

Core Viewpoint - TakeTwo Interactive Software (TTWO) is set to release its fourth-quarter fiscal 2025 results on May 15, with expectations of GAAP net revenues between $1.52 billion and $1.62 billion, and a GAAP net loss per share ranging from 20 cents to earnings per share of 13 cents [1] Revenue Expectations - The Zacks Consensus Estimate for TTWO's fiscal fourth-quarter revenues is $1.55 billion, reflecting a year-over-year growth of 14.73% [1] - The consensus for earnings is currently at $1.08 per share, indicating a significant year-over-year growth of 248.39% [2] Performance Drivers - NBA 2K is anticipated to significantly contribute to results, with a projected high-teens percentage increase in recurrent consumer spending for the franchise [3] - Other titles like Grand Theft Auto V and GTA Online are expected to continue contributing, although GTA Online may see declines [3] - New launches such as Sid Meier's Civilization VII, PGA Tour 2K25, and WWE 2K25 are expected to support top-line growth, with Civilization VII already setting a franchise record for preorders [4] Mobile Segment Challenges - Mobile bookings are projected to face challenges, with only low single-digit growth expected for the fiscal year, influenced by underperformance in titles like Empires & Puzzles [5] Cost Management - GAAP operating expenses for the fiscal fourth quarter are projected between $900 million and $920 million, with a 2% decline year over year due to normalized marketing and cost-saving initiatives [6] Earnings Outlook - TTWO currently has an Earnings ESP of 0.00% and a Zacks Rank 3 (Hold), indicating that the odds of an earnings beat are not favorable at this time [7]