Snail Q1 2025 Earnings Report

Snail EPS Results

• Actual EPS: -$0.06
• Consensus EPS: -$0.11
• Beat/Miss: Beat by +$0.05
• One Year Ago EPS: N/A

Snail Revenue Results

• Actual Revenue: $20.10 million
• Expected Revenue: $18.00 million
• Beat/Miss: Beat by +$2.10 million
• YoY Revenue Growth: N/A

Snail Announcement Details

• Quarter: Q1 2025
• Date: 5/14/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, May 14, 2025
• Conference Call Time: 4:30PM ET

Snail (NASDAQ:SNAL), together with its subsidiaries, researches, develops, markets, publishes, and distributes interactive digital entertainment for consumers worldwide. It offers games, content, and support for various platforms, including game consoles, personal computers, mobile phones, and tablets. Snail, Inc. was founded in 2009 and is headquartered in Culver City, California. Snail, Inc. operates as a subsidiary of Olive Wood Global Development Limited.

Snail Q1 2025 Earnings Call Transcript

Key Takeaways

• Revenue jumped 42.5% year-over-year to $20.1 M in Q1 2025, with bookings up 13.6% to $22.2 M driven by strong ARC franchise sales.
• ARC Ultimate Mobile Edition exceeded 4.8 M downloads and averaged 144 K DAUs, bolstered by new Ragnarok and Extinction map releases.
• GDC showcase unveiled major upcoming DLCs—Ark Aquatica underwater expansion and Lost Colony—and highlighted new indie titles via Wandering Wizard.
• Signed an MOU with MacMetrix to co-develop at least 10 short drama series for the SauteTV platform, representing an early-stage diversification opportunity.
• Q1 net loss widened to $1.9 M (vs. $1.8 M) and EBITDA loss grew to $3.2 M, reflecting higher headcount, R&D, and marketing expenses.

Presentation

[Operator]

Thank you for standing by, and welcome to Snell Inc. First Quarter twenty twenty five Earnings Conference Call and Webcast. I would now like to turn the call over to Steven Shinmetzky with Investor Relations.

[Steven Shinmachi, Investor Relations Analyst at Gateway Group]

Thank you and good afternoon everyone. Welcome to Snail Inc. First quarter twenty twenty five earnings conference call and webcast. Joining us for today's call are Snail Inc. Co CEO, Tony Tian Senior Vice President, Director of Business Development and Operations, Peter Kang and Chief Financial Officer, Heidi Chao.

[Steven Shinmachi, Investor Relations Analyst at Gateway Group]

The company's first quarter twenty twenty five earnings press release was filed earlier today and is available on the Investor Relations section of Snail Inc. Website at www.snail.com or the SEC's website at www.sec.gov/edgar. During this call, management may make forward looking statements regarding future events and the future financial performance of the company. Actual events or results may differ materially from our expectations and forward looking statements are subject to certain risks and uncertainties. Please refer to the company's Form 10 Q that has been filed with the SEC, the most recent Form 10 ks that was filed with the SEC on 03/26/2025, and other SEC filings.

[Steven Shinmachi, Investor Relations Analyst at Gateway Group]

The company may make these forward looking statements as of today and disclaims any duty or obligation to update them or to release publicly any updates or revisions to any forward looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any statement is based. Additionally, on today's call, we refer to bookings and EBITDA, which are non GAAP financial measures and provide useful information for the company's investors. You will find the historical reconciliation of bookings and EBITDA to the corresponding GAAP measures in the earnings press release and the company's SEC filings. And now I will turn the call over to Tony Guian, Co Chief Executive Officer of SNAIL. Sir, please proceed.

[Tony Tian, Co-CEO at Snail]

Thank you and good afternoon everyone. Thank you for joining us today to review our financial and operating results for the first quarter ended 03/31/2025. The first quarter saw a strong growth across our top line, delivering revenues of $20,100,000 a 42.5% increase compared to Q1 twenty twenty four. Our bookings also grew 13.6% to $22,200,000 compared to the same period last year. And our total units sold increased 45% to 1,500,000 primarily driven through our flagship ARC franchise.

[Tony Tian, Co-CEO at Snail]

Following the successful launch of the Extinction DLC and top three of BOBS Taught Tales DLC last quarter, We were excited to introduce the Astros Map for Arc Survival Ascended. This new content brings a unique twist deep in Greek mythology offering players a fresh and immersed experience. Player engagement across the ARC franchise continues to remain strong. As of 03/31/2025, ARC has been played for four point zero billion cumulative hours with the average playing time per user reaching one hundred sixty two hours. In late December of last year, we marked a significant milestone in expanding the ARC universe with the launch of ARC Ultimate Mobile Edition.

[Tony Tian, Co-CEO at Snail]

The response has been exceptional. Since launch, the mobile title has surpassed 4,800,000 downloads across iOS and Android platforms as of 03/31/2025. In the three months ended 03/31/2025, ARC Ultimate Mobile Edition had an average DAU of approximately 144,000. We recently expanded the mobile experience further with the release of two fine favorite maps, Ragnarok and Extinction. And we remain committed to delivering fresh content for this rapidly growing segment.

[Tony Tian, Co-CEO at Snail]

Mobile continues to be a key growth area for the ARC franchise, effectively lowering the hardware barrier to entry and expanding our reach to a broader global audience. We also attended the twenty twenty five Game Developer Conference, or GDC, this past March. Peter will dive deeper into what was reviewed during the event, but I'm excited to announce new upcoming content and DLCs for the ARC franchise activities and content celebrating ARC's ten year anniversary. The review of two new internally developed projects and showcasing several new titles that will expand our growing portfolio of games. Beyond traditional gaming, we also announced an encouraging announcement with our subsidiary Interactive Films, the division has now that focused on creating content in the vertical short film segment of the digital entertainment market.

[Tony Tian, Co-CEO at Snail]

And the interactive films division is our very own short film mobile distribution platform, SauteTV, which hosts 49 short film dramas as of this quarter end. Just last month, we signed an MOU with MacMetrix Inc, a publicly traded entity under the NYSE American, which operates a similar platform to ours for the FLEX TV, a short video streaming platform that produces and hosts short dramas. And at this MOU, both parties have committed to co developing at least 10 short dramas. Both parties will leverage their respective strengths to establish a comprehensive collaboration framework for the joint development, production, and a global distribution of short dramas through our respective platforms to reach audiences across North America, Southeast Asia, and other global regions. This includes a collaborative effort on the creative direction and script development of the short dramas, jointly overseeing production progress and budgeting and providing an avenue for both organizations to broaden reach by tapping into each other's audience.

[Tony Tian, Co-CEO at Snail]

This partnership is strategic and ideal for both parties as we both continue to expand our content portfolio and grow our presence in the global short drama industry. By combining MagMetrix established production and distribution capabilities with our expertise in AI and immerse storytelling, we remain committed to accelerating this portion of business and expanding our portfolio of short dramas on the SALTY TV platform. SNAIL remains committed to delivering fresh content and experiences that engage our audience and players across multiple platforms and genres. With that, I will now hand it over to Peter who will provide updates to the ARC franchise, speak to the upcoming ten year anniversary of ARC Survival Evolved, our expanding GAIN portfolio and additional new information that was reviewed at GDC. Peter?

[Peter Kang, Director, SVP - Director of Business Development & Operations at Snail]

Thanks, Tony, and good afternoon, everyone. As many of you know, June 2025 will mark the ten year anniversary of our flagship title, Survival Evolved. What began as an ambitious sandbox survival game with dinosaurs, robust taming mechanics, and deep crafting systems has evolved into a global franchise with a passionate player base and a thriving creative content ecosystem. Looking back, Arc Survival Evolved was more than just a game launch. It was a bold step into an up and coming genre that demanded innovation, risk taking, and a close relationship with our community.

[Peter Kang, Director, SVP - Director of Business Development & Operations at Snail]

From the early days of early access to the full release and the many expansions that followed, Arc has continuously pushed boundaries and adapted to new platforms, new technologies, and new player expectations. In the past ten years, we've expanded the ARG universe across PC, console, and mobile, brought cinematic storytelling and voice talent to the forefront, and connected millions of players worldwide. At the heels of the ten year anniversary, we unveiled several exciting updates for the Ark franchise at this year's Game Developers Conference. The first was the reveal of a teaser trailer for Ark Aquatica, giving attendees an early look at the upcoming expansion map. The new map introduces a significant change in gameplay, with roughly 95% of the environment taking place underwater.

[Peter Kang, Director, SVP - Director of Business Development & Operations at Snail]

The expansion reflects our continued efforts to diversify gameplay and evolve the Ark experience as the franchise approaches its ten year milestone. The new DLC map is expected to launch in the coming months. We also unveiled the official trailer for Lost Colony, the next major DLC for Survival Ascended. This new expansion is being produced by Studio Wildcard. Expected to launch at the end of the year, we're proud to collaborate with such a respected and talented studio and are committed to delivering high quality content for players of ASA.

[Peter Kang, Director, SVP - Director of Business Development & Operations at Snail]

As Tony mentioned earlier, we recently launched two new maps for Arc Ultimate Mobile Edition, expanding the game's content and enhancing the mobile experience for our players. Looking ahead, we plan to release additional expansion maps, including Genesis Part one and Part two later this year as part of our ongoing efforts to support and grow the mobile platform. The mobile launch last year marked a transformational milestone for the Arc franchise, enabling us to reach a broader audience that was previously limited by hardware requirements. Mobile has become a vital sector in the gaming industry, and Arc Ultimate Mobile Edition now allows us to engage a completely new segment of players and continue to drive franchise growth across multiple platforms. Beyond these major content updates, we're also preparing a series of additional releases and announcements as part of our broader plans to commemorate the franchise's ten year anniversary.

[Peter Kang, Director, SVP - Director of Business Development & Operations at Snail]

On to BellRite, last month, we celebrated the one year early access anniversary of the game. The feedback from launch has been exceptional. As of Q1's end, we sold over 417,000 units, and the Steam wish list count remains over 1,000,000. To celebrate this milestone, we introduced a major update into the game with new content and player requested features that reflect our commitment to the long term support for the game. We're especially excited to bring Bellrite to the Xbox platform in Q4 of twenty twenty five, opening the experience to an even broader audience and continuing our efforts to make the game accessible across multiple channels.

[Peter Kang, Director, SVP - Director of Business Development & Operations at Snail]

The upcoming console launch represents a significant achievement in our roadmap and reflects our ongoing commitment to cross platform expansion and reaching a wider player base. Outside of Ark and Bellwright, we made several other announcements to upcoming games. We debuted teaser trailers for Nanyin Sutra, Wushu, and Nanyin Sutra, Immortal, which are two in house developed projects. We also showcased new trailers for upcoming games such as For the Stars, Honeycomb, the World Beyond, Robots at Midnight, and Echoes of Elysium. Our indie publishing label, Wandering Wizard, launched two new titles this quarter and recently acquired the publishing rights to Whispers of West Grove, an upcoming psychological horror game developed by NVNT Studios, and Rebel Engine, a hack and slash with the speed and gunplay of a ninety's first person shooter developed by Seven Leaf Clover out of Buenos Aires, Argentina.

[Peter Kang, Director, SVP - Director of Business Development & Operations at Snail]

The continued growth of Wandering Wizard reflects our larger goal of diversifying our creative output, expanding into new genres, and partnering with a wider range of independent developers strengthens our position in the indie publishing space and supports our long term vision of building a more diversified and resilient entertainment portfolio. With a strong lineup of upcoming titles and new content for the ARC franchise, along with additional content tied to the ten year anniversary, we remain committed to delivering fresh, engaging experiences for our players, and in turn, driving returns for our shareholders. With that, I will now turn the call over to Heidi to discuss our financial results. Heidi?

[Heidy Chow, CFO & Director at Snail]

Thank you, Peter, and hello, everyone. Thank you for joining us today. I'm pleased to share the details of our financial results for the first quarter ended 03/31/2025. Net revenue for the first quarter was $20,100,000 a 42.5% increase compared to 14,100,000.0 in the same period last year. The increase was primarily due to an increase in total ARC sales of 2,700,000.0 and increase in ARC mobile sales of $1,300,000 and the company deferring $3,300,000 less sales during the first quarter of twenty twenty five compared to the same period last year.

[Heidy Chow, CFO & Director at Snail]

We deferred less revenue this quarter as the majority of ARDS survival ascended DLCs have been released. Requiring a lower percentage of each ARDS survival ascended sale being deferred in 2025. Net loss in the first quarter was $1,900,000 compared to a loss of $1,800,000 in the same period last year. As a result of the aforementioned increase in net revenue offset by increase in cost of revenue and operating expenses. A result of our increase in headcount, research and development, and marketing expenses.

[Heidy Chow, CFO & Director at Snail]

Bookings for the three months ended 03/31/2025 increased 13.6% to $22,200,000 compared to $19,600,000 from the same period last year. The increase was primarily due to the release of AHRQ Survival Ascended DLCH trials this quarter and the release of BOBSTodd Health and BellRite in the later quarter of twenty twenty four. EBITDA for the quarter ended 03/31/2025 was loss of $3,200,000 compared to a loss of $1,900,000 in the prior year period. The decrease was primarily due to an increase in benefits from income taxes of $1,000,000 a decrease in interest expenses of 300,000 and an increase in net loss of $100,000 partially offset by a decrease in interest income and interest income related party of 100,000 As of 03/31/2025, unrestricted cash and cash equivalents was 9,400,000.0. To review our detailed financial statements, please refer to the earnings press release and the Form 10 Q filed with the SEC.

[Heidy Chow, CFO & Director at Snail]

Before I hand the call back to the operator for the Q and A session, I would like to take a moment to address the current tariff landscape and share a brief overview of our key goals and strategic opportunities for 2025. We believe that the direct impact of tariff on our business is likely to be limited. However, indirect effect may still influence our business. These include a potential rise in the price of console platforms like Xbox and PlayStation, which could defer new players who don't yet own a console. Additionally, increased hardware costs and broader economic uncertainties stemming from tariff may deepen overall consumer spending, including premium games.

[Heidy Chow, CFO & Director at Snail]

That said, PC gaming accounted for approximately 48% of our revenue in 2024, compared to 41% from consoles. We also believe that our ART mobile game will help offset some of the broader effects on tariffs as we continue to launch new paid content in the future and given the mobile mode hurdles the barriers of owning a console. Since current gen consoles are past the mid lifecycle of a console generation, we don't view a possible increase in console prices as a major long term concern and remain cautiously optimistic. Additionally, the gaming industry has historically shown resilience in the face of economic uncertainty. While short term impacts are possible, we remain confident in our ability to adapt to changing economic conditions.

[Heidy Chow, CFO & Director at Snail]

Looking ahead to the rest of the year, as Peter mentioned, we're gearing up to celebrate the ten year anniversary of ARCH's Survival Evolved franchise with a series of upcoming releases and announcements in the works to commemorate the game's long lasting legacy and dedicated player community. We remain focused on expanding the global reach of our games, bringing our content to new audiences around the world. The ART Mobile game will continue to play a key role in this effort. As mobile broadens the franchise's accessibility and impact across a wider player base, beyond ARCH, we are actively investing in scalable growth opportunities across adjacent genres and emerging platforms. Our goal remains to deliver innovative, engaging experiences that resonate with plays across diverse platforms and game styles.

[Heidy Chow, CFO & Director at Snail]

Thank you all for joining us today. We will now open the line for Q and A. Operator?

[Operator]

Thank you. We will now be conducting a question and answer session. If you would like to ask Our first question comes from Michael Kupinski with NOBLE Capital Markets. Please proceed with your question.

[Michael Kupinski, Director of Research, Managing Director, Head of Technology Research at Noble Financial Capital Markets]

Thank you and congratulations on your strong quarter. A couple of questions. I was wondering if you can just talk a little bit about your approach to revenue diversification. I know that you had a number of initiatives here. I just kind of wanted like to hear your strategy for that.

[Peter Kang, Director, SVP - Director of Business Development & Operations at Snail]

Thank you. This is Peter Kang and we'll address your question here. We're actively exploring and investing in new business or games that will improve revenue diversification. For example, we have launched a short drama business and signed an MOU with Mega Matrix to accelerate our penetration in that industry. On gaming, we're always releasing games we acquired from our gaming network this year.

[Peter Kang, Director, SVP - Director of Business Development & Operations at Snail]

With Robots at Midnight, Honeycomb, World Beyond and Echoes of Elysium, all releasing this year, we expect the new revenue streams will have a meaningful contribution for our revenue diversification efforts.

[Michael Kupinski, Director of Research, Managing Director, Head of Technology Research at Noble Financial Capital Markets]

Peter, you mentioned MOU. I was just wondering if you could talk a little bit about the revenue implications of MOU with the Mega Matrix.

[Peter Kang, Director, SVP - Director of Business Development & Operations at Snail]

Thank you. I'll let Tony address this one. Tony? Sure.

[Tony Tian, Co-CEO at Snail]

Hi, Michael. I think at this moment it's probably a little early to measure the potential revenue contribution from the short drama business as we just announced the MOU. But what I can tell is that we have an in house team and we have been evaluating developing the land of business for quite a while. Over the past several weeks, the MPO team and also our in house team has been working together. At this moment, we are in the early stage to working on a couple of short terma series.

[Tony Tian, Co-CEO at Snail]

So there will be some revenue contribution from that line of business, but at this moment we don't have a specific number of how many short drama series we will be developing, producing this year. But based on the MOU, and the two parties are willing to co develop at least 10 drama series over the next twelve months.

[Michael Kupinski, Director of Research, Managing Director, Head of Technology Research at Noble Financial Capital Markets]

Gotcha. And then I was wondering if you could talk about, obviously you had some cost to increase significantly, some of the research and development costs certainly for some of these products and so forth, but also from advertising and marketing, which was up about a million or so. I was just wondering if you could just talk a little bit about advertising and marketing costs and how we should think about those line items as you kind of look to the upcoming quarters.

[Peter Kang, Director, SVP - Director of Business Development & Operations at Snail]

Gotcha. This is Peter again. Well, we increased the size of our portfolio and as such, marketing expenditures should be increasing. In 2025, we attended the GDC Expo, had a booth there and unveiled several games and DLCs in our content pipeline. Those unveiled including Ark Aquatica, Ark Lost Colony, Nayan Sutra Immortal, Nayan Sutra Wuxu, just to name a few.

[Peter Kang, Director, SVP - Director of Business Development & Operations at Snail]

Majority of the increase is associated with our GDC participation. We also increased our marketing spend to support game releases in 2025. In addition to the new DLCs for the Arc franchise, we also announced Robots at Midnight, Honeycomb, The World Beyond, and Echoes of Elysium. We're truly excited about these releases. Moving forward, we do not expect to see such quarter over quarter increases as we refine our game avail strategies and explore our participation in other game shows.

[Michael Kupinski, Director of Research, Managing Director, Head of Technology Research at Noble Financial Capital Markets]

Got you, Peter. And my final question is, obviously this is, you know, you have a lot of expenses, lot of product launches and so forth. And I would assume that you're going to monetize that in coming quarters. But how do we how should investors look at the bottom line and your approach to turning net income positive?

[Peter Kang, Director, SVP - Director of Business Development & Operations at Snail]

Great question. Our approach to positive bottom line really centers around cost control and diversified monetization. On the subject of cost control, outsource certain development functions and reduce our fixed costs and internal headcount burden. Furthermore, R and D and marketing expenses are tightly aligned with focused projects and near term revenue targets. Onto monetization, we have expanded into the short drama business inside the MOU with Mega Matrix to accelerate the short term drama of business growth.

[Peter Kang, Director, SVP - Director of Business Development & Operations at Snail]

We have premium mods monetizing Arc Survival Ascended, allowing Snail to scale content with minimal internal investment. We have remade our Arc mobile game, Arc Ultimate Mobile Edition. And that in itself can drive high margin microtransactions. We continuously seek our investments in profitable and scalable content to add to our content pipeline.

[Michael Kupinski, Director of Research, Managing Director, Head of Technology Research at Noble Financial Capital Markets]

Terrific. That's all I have. Congratulations. Keep up the good work. Thank you.

[Operator]

At this time, this concludes Inc. First quarter twenty twenty five conference call. If your question was not taken, please contact Snail Inc. IR team at snalgateway grp dot com. Thank you for your participation, and you may now disconnect.

Participants

Executives

• Tony Tian, Co-CEO
• Peter Kang, Director, SVP - Director of Business Development & Operations
• Heidy Chow, CFO & Director

Analysts

• Steven Shinmachi, Investor Relations Analyst at Gateway Group
• Michael Kupinski, Director of Research, Managing Director, Head of Technology Research at Noble Financial Capital Markets