Lainie Goldstein
Chief Financial Officer at Take-Two Interactive Software
Thanks Karl, and good afternoon, everyone.
Today, I'll discuss the key highlights from our first quarter before reviewing our financial outlook for the full year and second quarter of fiscal 2024. Our combination with Zynga closed on May 23, 2022, which affects the comparability of our results relative to last year. Additional details regarding our actual results and outlook are contained in our press release.
We had a strong start to the fiscal year, powered by our portfolio of iconic, industry-leading intellectual properties. As we approach our next phase of growth, our teams continue to make excellent progress advancing our development pipeline and capitalizing on our revenue-driven opportunities and synergies. We also partnered together to maintain our focus on efficiency amidst the challenging macroeconomic backdrop and cautious consumer spending trends. I'd like to thank our incredible teams worldwide for their determination and passion for our business.
Now, moving onto our results. We achieved net bookings of $1.2 billion, which was at the high-end of our guidance range. In the current backdrop, many consumers are purchasing established franchises and those that offer great value, and our catalog stands at the intersection of these two trends. Accordingly, our performance reflects better-than-expected results from Grand Theft Auto Online and Grand Theft Auto V and NBA 2K23. During the quarter, we launched Marvel's Midnight Suns for Gen 8 consoles, Lego 2K Drive and After Us. Recurrent consumer spending rose 38% for the period, which was above our outlook of 35% growth and accounted for 84% of net bookings. The outperformance was primarily driven by Grand Theft Auto Online and NBA 2K23.
GAAP net revenue increased 17% to $1.28 billion and cost of revenue increased 39% to $606 million, driven by $187 million of amortization of acquired intangibles. We also recorded an impairment of $18 million related primarily to capitalized software and development costs for an unreleased title, which affected our management results compared to our guidance.
Operating expenses increased by 25% to $883 million. On a management basis, operating expenses grew by 46%, which primarily reflected a full quarter of Zynga, higher personnel costs and depreciation related to office buildouts and capitalized IT expenses.
Turning to our guidance, I'll begin with our full fiscal year expectations. As Strauss mentioned, our business is performing well and we are reiterating our net bookings outlook range of $5.45 billion to $5.55 billion. The largest contributors to net Bookings are expected to be NBA 2K, Grand Theft Auto Online and Grand Theft Auto V, our hyper-casual mobile portfolio, Empires & Puzzles, Toon Blast, Merge Dragons, Words With Friends, Red Dead Redemption 2 and Red Dead Online, and Zynga Poker. We expect the net bookings breakdown from our labels to be roughly 51% Zynga, 30% 2K, 17% Rockstar Games and 2% Other. And, we forecast our geographic net bookings split to be about 65% United States and 35% International.
We continue to forecast recurrent consumer spending growth of 5% compared to fiscal 2023, representing 78% of net bookings. Mobile trends are projected to remain stable and Zynga's ad business continues to deliver growth.
We expect to generate approximately $100 million in non-GAAP adjusted unrestricted operating cash flow, and deploy approximately $180 million for capital expenditures primarily to support our office buildouts and larger footprint.
We continue to expect GAAP net revenue to range from $5.37 billion to $5.47 billion. Our total operating expenses are expected to range from $3.38 billion to $3.4 billion as compared to $3.45 billion last year.
On a management basis, our operating expenses are expected to grow by approximately 15% year-over-year, due primarily to a full year of Zynga, an increase in personnel and marketing expenses, and higher depreciation of office buildouts and capitalized IT expenses, which are being partially offset by the realization of synergies from our combination with Zynga and savings from our cost reduction program. As we announced previously, our teams are taking extensive measures to review our cost structure and reduce discretionary costs whenever possible to offset the current consumer backdrop and inflationary environment, while still investing for growth.
Now, moving onto our guidance for the fiscal second quarter. We project net bookings to range from $1.4 billion to $1.45 billion, compared to $1.5 billion in the second quarter last year. Our release slate for the quarter includes Red Dead Redemption and Undead Nightmare for Switch and PlayStation 4, and NBA 2K24. The largest contributors to net bookings are expected to be NBA 2K, Grand Theft Auto Online and Grand Theft Auto V, our hyper-casual mobile portfolio, Empires & Puzzles, Toon Blast, Words With Friends, Merge Dragons, Red Dead Redemption 2 and Red Dead Online, and Zynga Poker.
We project recurrent consumer spending to decline by approximately 7%, which assumes modest declines in our mobile business; NBA 2K, driven by changes to its summer promotional cadence; and Grand Theft Auto Online; as well as a reduction in DLC revenue from several titles that were released in prior years.
We expect GAAP net revenue to range from $1.26 billion to $1.31 billion. Operating expenses are expected to range from $811 million to $821 million. On a management basis, operating expenses are expected to grow by approximately 5% year-over-year, driven by last year's acquisition of Popcore and higher personnel costs, which are being partly offset by the Zynga synergies and our cost savings initiatives.
In closing, we are confident that the actions our teams are taking this year are preparing us for a strong trajectory of growth. Through our collective efforts, we continue to believe that we are positioning our business for a significant inflection point in fiscal 2025 that will culminate in us delivering new record levels of operating performance next year and beyond. We thank all of our stakeholders for their continued support, and we look forward to delivering on this exciting next chapter.
Thank you. I'll now turn the call back to Strauss.
