Videogame publisher Take-Two Interactive Software reported a 31.4% rise in adjusted revenue, driven by strong demand for "NBA 2K17," the latest version of its popular basketball franchise, as well as higher downloads of its games.
The company's shares were up 5% at $47 in after-market trading on Wednesday.
Take-Two, like rivals Electronic Arts and Activision Blizzard, has in recent years benefited from a shift to the high-margin digital business, where players download games rather than buy physical game discs.
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Adjusting for deferrals, net revenue rose to $479.4 million from $364.9 million in the second quarter ended Sept.30, beating the average analyst estimate of $402.6 million, according to Thomson Reuters.
Take-Two (ttwo) forecast current-quarter revenue of $675 million to $725 million, compared with the average analyst estimate of $649.7 million.
However, the company's net income fell to $36.4 million, or 39 cents per share, from $54.7 million, or 55 cents per share, a year earlier.
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Take-Two said selling and marketing expenses jumped 46.1% in the quarter.
The company confirmed earlier this month that it would release a new "Red Dead" videogame in the second-half of 2017, after teasing the return of the Western action-adventure series on social media.
"We have very high hopes for the project," Take-Two Chief Executive Strauss Zelnick said in an interview.
"Red Dead Redemption 2" should be one of 2017's biggest releases, Wedbush analyst Michael Pachter said in a pre-earnings note, adding that the game positions the company to deliver profits for the foreseeable future.
The new "Red Dead" game will be released by Take-Two's Rockstar Games studio, best known for creating the popular "Grand Theft Auto" franchise.