Christopher Schoell

Chris Schoell sought clarification on Playtika's 2026 guidance, specifically what it assumes for Slotomania and social casino performance, and the key variables influencing performance at the higher or lower end of the guidance ranges. He also inquired about updated longer-term D2C targets given the current mix and its potential limits.

Answer

Craig Abrahams, President and Chief Financial Officer, noted the business's shift to 74% casual games, with SuperPlay's overperformance as an upside and social casino declines as a downside for guidance. He reiterated the 40% long-term D2C revenue target, emphasizing focus on internal execution rather than external policy changes.

Christopher Schoell from UBS inquired about the drivers for the Q4 guidance, which implies a revenue decline but EBITDA improvement, and asked for an update on capital allocation post-SuperPlay and the stabilization timeline for Slotomania.

Answer

CFO Craig Abrahams explained the Q4 guidance reflects strong cost management boosting EBITDA, while underperformance in Slotomania and other casino titles lowered the revenue outlook. He stated that a full capital allocation update will follow the SuperPlay deal closure. CEO Robert Antokol added that Slotomania's stabilization is expected next year, driven by new IGT content launching in Q4 and other product changes.

Christopher Schoell asked about Cogent's outlook for total company revenues and EBITDA in 2026, considering the ongoing Sprint mix shift, and sought guardrails on achievable connections or revenues for the Waves business.

Answer

CEO Dave Schaeffer stated that Cogent anticipates a multi-year average revenue growth rate of 6%-8% and a moderation of EBITDA margin expansion to approximately 200 basis points annually. He highlighted the Waves business's less than 2% market share in North America and expected accelerated growth due to increasing credibility and footprint.

Christopher Schoell inquired about Cogent Communications' total company revenue and EBITDA outlook for 2026, considering the declining Sprint revenue mix. He also asked for insights into the expected scaling of the Wavelengths business, including achievable connections and revenues.

Answer

CEO Dave Schaeffer stated that Cogent Communications does not provide specific quarterly or annual guidance but expects a multi-year average revenue growth rate of 6%-8%. He noted that 64% of Sprint-acquired revenues have attrited, while Cogent's legacy revenues grew 27%. Schaeffer anticipates continued positive sequential revenue growth, driven by a shift to more profitable On-Net services (80% of Q4 sales were On-Net), which will contribute to at least 200 basis points of annual margin expansion. Regarding the Wavelengths business, Schaeffer highlighted its acceleration, significant contribution to margin expansion due to being On-Net, and a market share of less than 2% in North America, indicating substantial growth potential.

Christopher Schoell of UBS Group AG asked for an update on the timeline for returning to top-line revenue growth, which was previously expected by mid-Q3, and sought the rationale behind raising the long-term EBITDA margin expansion target to 200 basis points annually.

Answer

Dave Schaeffer, Founder & CEO, stated that the rate of revenue decline improved significantly from a $5.2M decline to an $800k decline sequentially. He expects revenue to be flat to slightly positive in Q3 and grow thereafter. The confidence in 200 bps of annual margin expansion comes from the focus on high-margin on-net services, historical performance, and having completed the majority of the Sprint revenue grooming.

Christopher Schoell from UBS asked for the rationale behind raising the long-term annual revenue growth target to 6-8% and requested a breakdown of this growth expectation by customer segment. He also inquired about the core growth rates for the Corporate and NetCentric businesses, excluding the impact of intentional revenue grooming.

Answer

CEO David Schaeffer attributed the confidence in the new growth target to having a clear line of sight to the end of Sprint revenue grooming by mid-Q3 and higher confidence in the wavelength sales trajectory. He projected NetCentric growth (IP + wavelength) to be north of 10% and Corporate growth in the mid-single digits. He estimated that the core Corporate segment grew 3-4% and NetCentric grew 6-7% year-over-year, though he noted these were less precise figures as the businesses become more integrated.

Christopher Schoell asked about Cogent's preference between leasing or selling its data center and IPv4 assets and whether monetization would involve a few large deals or many smaller ones.

Answer

CEO David Schaeffer explained that for IPv4 addresses, the current strategy is leasing, though selling is an option if prices improve. For data centers, Cogent is agnostic between selling and leasing, allowing the market to determine the best path. Current letters of intent are split 60% for leasing and 40% for purchasing. He also affirmed the company is very comfortable with its dividend policy despite a temporary rise in leverage.

Chris Schoell inquired about what is resonating most with NBA 2K players, given its consistent outperformance, and the biggest opportunities for the franchise's next leg of growth, such as international expansion, user base expansion, or enhanced monetization.

Answer

President Karl Slatoff attributed NBA 2K's success to Visual Concepts' and 2K's 'perpetual diligence,' constantly refining the game based on consumer feedback and introducing new features like 'The Cruise.' He sees continued growth by maintaining this approach, leading to a higher installed base and monetization, and highlighted significant international expansion potential due to the NBA's global reach and partnership.

Chris Schoell asked about the consistent outperformance of NBA 2K, what specifically resonates with players, and the biggest opportunities for future growth, such as international expansion, user base expansion, or enhanced monetization.

Answer

President Karl Slatoff attributed NBA 2K's success to the development team's 'perpetual diligence,' constant communication with consumers, and maniacal attention to detail, leading to 30%+ year-over-year growth in engagement and recurrent consumer spending. He highlighted new features like 'The Cruise' as impactful. Slatoff identified continued refinement, international expansion (supported by NBA's global reach), and growing the user base as key opportunities, expressing optimism for the franchise's future.

Chris Schoell asked about the impact of recent iOS changes on mobile margins, the availability of alternate payment mechanisms across Take-Two's portfolio, and any resulting uplift to gross margins. He also sought insights on proposed Google Play changes and the drivers behind the new GTA VI timeline, including confidence in the revised date.

Answer

Strauss Zelnick, Chairman and CEO, confirmed expectations for declining third-party distribution costs and the success of their direct-to-consumer mobile initiative. He stated that recent litigation results (iOS) strengthen their position, expecting increased net bookings and margins. For GTA VI, the delay was driven by a desire to deliver a perfect entertainment experience, noting that past delays, though painful, were never regretted, contrasting with competitors who suffered by not delaying.

Chris Schoell asked about the availability and impact of alternate payment mechanisms across Take-Two's mobile portfolio following recent iOS changes, any uplift to gross margins, and the company's thoughts on proposed Google Play changes. He also asked about the drivers behind the new GTA timeline and confidence in the revised date.

Answer

Strauss Zelnick, Chairman and CEO, confirmed that the direct-to-consumer initiative, launched after the Zynga acquisition, has been successful and rolled out across most of the mobile portfolio. He noted that recent litigation results strengthen their position, leading to higher net bookings and margins. Regarding GTA VI, he stated the delay was driven by a desire to deliver a perfect entertainment experience that exceeds consumer expectations, emphasizing that past delays have never been regretted.

Christopher Schoell from UBS Group asked about the implied deceleration in mobile growth guidance after a strong Q1 and also inquired about the company's capital allocation priorities.

Answer

CFO Lainie Goldstein addressed the mobile guidance, explaining that despite strong Q1 momentum, the forecast remains conservative due to the age of some mature titles and the typical life cycle curves of newer hybrid-casual games. CEO Strauss Zelnick outlined capital allocation priorities as: 1) organic growth, 2) selective, accretive M&A, and 3) opportunistic shareholder returns via buybacks, noting the company's strong balance sheet supports all three.

Christopher Schoell asked if the company's previous long-term outlook of $8 billion in bookings and over $1 billion in cash flow remains valid post-GTA VI, and whether the second GTA VI trailer provided a similar monetization uplift to GTA Online as the first.

Answer

CEO Strauss Zelnick stated that while the company doesn't guide that far out, their hopes and expectations are now more optimistic than before. Regarding the trailer, he noted it was too early to measure an immediate impact but highlighted that it broke records with 475 million views in 24 hours, indicating unprecedented anticipation.

Chris Scholl asked about future cash flow generation relative to historical guidance, the company's capital allocation priorities, and the expected sales uplift from the launch of Civilization VII.

Answer

CFO Lainie Goldstein expressed expectations for strong cash flow, with priorities being debt paydown and potential acquisitions. She declined to provide specific guidance for Civilization VII, stating it would be part of the full-year outlook on the May call, but reiterated confidence in record net bookings for fiscal 2026 and 2027.

Christopher Schoell asked for the drivers of the implied bookings growth acceleration in Q4 and for key learnings from the Grand Theft Auto partnership with Netflix, including the potential for similar future deals.

Answer

CFO Lainie Goldstein attributed the Q4 acceleration to a stronger release slate, including Civilization VII, PGA Tour, and WWE, compared to the prior year. CEO Strauss Zelnick stated they value the Netflix relationship and are open to more licensing deals, but will remain highly selective to protect their IP.

Chris Schoell inquired about AST SpaceMobile's approach to additional capital raises in 2026, despite being fully funded for 90 satellites, and whether the Q4 OpEx and CapEx figures should be considered a reliable run rate for modeling next year's spending, given potential volatility.

Answer

Scott Wisniewski, President and Chief Strategy Officer, stated that the company's focus is on commercial prepayments, commitments, and revenue growth, while Andy Johnson, CFO and Chief Legal Officer, added that they remain opportunistic regarding capital markets. Johnson clarified that Q4 OpEx is a fairly good run rate due to dynamic growth, but CapEx will be volatile due to launch payment timing, and a holistic 2026 outlook will be provided in late February/early March.

Chris Schoell from UBS followed up on AST SpaceMobile's funding progress, asking if the company would continue opportunistic capital raises into 2026 despite being funded for 90 satellites. He also asked if the Q4 OpEx and CapEx guidance should be viewed as a good run rate for modeling 2026, or if spending would fluctuate due to launch payments.

Answer

Scott Wisniewski, President and Chief Strategy Officer, stated that the company's focus is 100% on commercial activities, including prepayments and revenue, while remaining opportunistic about capital markets. Andy Johnson, CFO and Chief Legal Officer, added that OpEx in Q4 is likely a good run rate given dynamic growth and workforce size, but CapEx will fluctuate due to launch payment timing. He indicated a comprehensive 2026 outlook would be provided in early 2026.

Christopher Schoell of UBS Group inquired about the specific use cases and technological advantages driving wins in the government sector, and how the potential U.S. Government Total Addressable Market (TAM) has evolved. He also asked if the company's current spectrum portfolio is now sufficient for its global plans.

Answer

Founder, Chairman & CEO Abel Avellan stated they are "very bullish" on government applications, with eight contracts covering both communications and non-communications use cases. President & Chief Strategy Officer Scott Wisniewski added that the goal is to secure "program of record" contracts worth over $100 million each. Avellan also confirmed the current spectrum holdings are sufficient to deliver their target data rates globally.

Christopher Schoell of UBS requested an update on beta tests with carrier partners, clarification on the satellite manufacturing timeline, and insight into the capital required to fund the launch of 60 satellites through 2026.

Answer

CEO Abel Avellan confirmed that initial service activations demonstrating video calls have already begun with partners in the U.S., Europe, and Japan, with beta services on track for later this year. He clarified the 6-satellite-per-month manufacturing rate refers to fully integrated satellites toward year-end. Abel Avellan and CFO Andy Johnson emphasized a focus on non-dilutive funding sources, including government contracts and progress with agencies like the IFC and EXIM Bank, to fund future launches, using the ATM facility for flexibility.

Christopher Schoell from UBS asked for a comparison of AST SpaceMobile's technology against the T-Mobile/Starlink offering and inquired about the total funding required to launch 60 satellites by 2026.

Answer

CEO Abel Avellan differentiated ASTS's offering as a full broadband service (voice, data, video) with superior spectrum capacity and data rates, unlike competitors' intermittent messaging services. CFO Andrew Johnson stated that with a pro forma balance sheet of approximately $1 billion, the company is well-positioned for the next 12 months and to fund operations well beyond the first 25 satellites, while continuously evaluating smart capital-raising opportunities.

Christopher Schoell from UBS asked for more detail on the launch cadence for the planned 60 satellites, the company's confidence in Blue Origin's New Glenn rocket schedule, and any backup plans. He also inquired about how space policy and regulation might evolve under a new administration.

Answer

Chairman and CEO Abel Avellan outlined a multi-launch strategy with partners including SpaceX, ISRO, and Blue Origin. He highlighted the New Glenn rocket's ability to launch up to 8 satellites at once, with a planned cadence ramping up (e.g., 1, 4, 4, 8, 8, 8). Mr. Avellan expressed confidence that the incoming administration would foster a growth environment for the space sector, noting that providing nationwide broadband connectivity is a bipartisan mission and that government opportunities would become more relevant.

Christopher Schoell posed a two-part question regarding which business areas are most sensitive to a softening macro environment and how EA views its pricing power for key franchises, given that peers have been raising prices.

Answer

CEO Andrew Wilson explained that historically, EA's largest franchises have been highly resilient during economic downturns due to the strong value proposition of interactive entertainment. On pricing, he emphasized that the focus is on delivering quality and value, which supports a strong business across various price points from free-to-play to deluxe editions. CFO Stuart Canfield confirmed the current guidance does not assume any changes to their pricing strategy.

Christopher Schoell of UBS inquired about how the competitive release pipeline influences EA's launch timing for major titles and asked about the potential opportunity from a new Nintendo console.

Answer

CEO Andrew Wilson stated that while EA has an FY '26 launch window for Battlefield, the company would consider an alternate window to ensure a successful launch in a competitive market. He also noted any new console is a benefit, citing the success of The Sims on Switch as an example of the opportunity to acquire new players for franchises like FC and Madden. CFO Stuart Canfield added that their multiyear framework provides flexibility for launch timing.

Christopher Schoell asked for clarification on the drivers behind the implied net bookings acceleration in Q4 compared to Q3 and requested more detail on the specific impact of College Football on the Madden franchise.

Answer

CFO Stuart Canfield explained that the quarterly phasing of bookings is influenced by differing release slates, seasonality, and difficult year-over-year comparisons, noting a partner title launch in Q4 this year. He reiterated strong conviction in the overall American football business, with both College Football and Madden contributing to the performance reflected in the raised full-year guidance.

Christopher Schoell inquired about the drivers for the Q1 broadband subscriber loss guidance, the competitive landscape, and the performance and strategic importance of WOW!'s mobile product.

Answer

CEO Teresa Elder attributed past subscriber performance improvements (ex-hurricanes and ACP) to simplified pricing and lower churn, driven by initiatives like the optional price lock and the YouTube TV partnership. She noted competition is primarily from traditional cable. Regarding mobile, she stated it is not a primary focus, as the company achieves churn reduction and customer value through its core HSD offerings and pricing strategy.