Snail Q2 2026 Earnings Report

Snail EPS Results

• Actual EPS: -$0.36
• Consensus EPS: $1.55
• Beat/Miss: Missed by -$1.91
• One Year Ago EPS: N/A

Snail Revenue Results

• Actual Revenue: $21.80 million
• Expected Revenue: $29.00 million
• Beat/Miss: Missed by -$7.20 million
• YoY Revenue Growth: N/A

Snail Announcement Details

• Quarter: Q2 2026
• Date: 8/11/2026
• Time: After Market Closes
• Conference Call Date: Tuesday, August 11, 2026
• Conference Call Time: 4:30PM ET

Snail (NASDAQ:SNAL) Inc. (NASDAQ: SNAL) is a digital entertainment company focused on the development, publishing and operation of free-to-play online games for PC and mobile platforms. The company’s portfolio spans a variety of genres that include massively multiplayer online role-playing games (MMORPGs), strategy titles, and casual mobile games. Snail manages its games throughout the entire lifecycle, providing design, development, server hosting and community support services to engage players worldwide.

Founded in the early 2000s and headquartered in Xiamen, China, Snail has expanded its footprint with regional offices in North America, Europe and Southeast Asia. Flagship titles in its library include fantasy-themed MMORPGs and real-time strategy games that have attracted millions of users across Asia before being adapted for Western markets. In addition to in-house development, the company licenses its proprietary game engine technology and offers publishing partnerships to independent studios seeking access to its global distribution channels.

Snail’s business model combines in-game monetization through virtual item sales and subscriptions with advertising and co-development agreements. This diversified approach helps the company manage risks associated with the hit-driven nature of the gaming industry. While Snail remains primarily focused on entertainment software, it continues to explore complementary opportunities in cloud gaming infrastructure and esports event hosting.

Snail Q2 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Second-quarter revenue and bookings declined year over year to $19.7 million and $21.8 million, respectively, largely due to lower sales of ARK: Survival Evolved and ARK: Survival Ascended. Total quarterly unit sales also slipped to 2.0 million from 2.1 million.
• Positive Sentiment: Net loss improved substantially to $3.0 million from $16.6 million, while unrestricted cash increased to $13.3 million from $8.6 million at year-end 2025. A reduced ARK licensing fee is saving approximately $1.5 million per quarter and contributed to improved gross profit.
• Positive Sentiment: Several ARK releases shifted into July, including Genesis Part 1 Ascended, Tides of Fortune, and Dragontopia, positioning the company to recognize approximately $11 million of deferred revenue from Genesis Part 1 in the third quarter, with additional DLC revenue recognized through Q4.
• Positive Sentiment: Bellwright’s console launch showed encouraging early traction, including a top-five paid-game ranking on Xbox, strong user ratings, and more than 1 million lifetime units sold. ARK continued to generate substantial engagement, with Ascended averaging about 120,000 daily active users and ARK Mobile averaging approximately 129,000.
• Neutral Sentiment: Snail is expanding beyond ARK through three AAA titles, the AI-powered Non-Human Player companion, the $USDO stablecoin initiative, and additional PixARK content. These efforts could diversify revenue over time, but the AI and stablecoin products remain in development or subject to regulatory approvals.

Presentation

[Operator]

Thank you for standing by, and welcome to Snail, Inc.'s second quarter 2026 earnings conference call and webcast. I would now like to turn the call over to Steven Shinmachi with investor relations.

[Steven Shinmachi, Investor Relations Associate at Gateway]

Thank you, and good afternoon, everyone. Welcome to Snail, Inc.'s second quarter 2026 earnings conference call and webcast. Joining us for today's call are Snail, Inc's Chief Executive Officer, Hai Shi, Chief Financial Officer, Heidy Chow, and Senior Vice President, Director of Business Development and Operations, Peter Kang. The company's second quarter 2026 earnings press release was filed earlier today and is available on the investor relations section of Snail, Inc.'s website at www.snail.com or the SEC's website at www.sec.gov/edgar.

[Steven Shinmachi, Investor Relations Associate at Gateway]

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 and other SEC filings. The company makes these forward-looking statements as of today.

[Steven Shinmachi, Investor Relations Associate at Gateway]

It disclaims any duty or obligation to update them or to release publicly 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. I will turn the call over to Peter Kang, Senior Vice President and Director of Business Development and Operations of Snail. Sir, please proceed.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

Thank you, and good afternoon, everyone. Thank you for joining us today to review our financial and operational results for the second quarter ended June 30, 2026. Over the last several months, we have made encouraging strides across our gaming pipeline and diversified content roadmap. Through DLC releases, console launches, meaningful progress across key titles in development, and advances in our strategic initiatives, we have strengthened our foundation for the remainder of 2026.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

With additional content, products, and growth initiatives planned over the next several quarters, we believe Snail is well-positioned to build momentum across our portfolio. Starting with ARK, we maintained consistent activity and engagement during the quarter. ASE sold approximately 574,000 units with average DAU of approximately 105,000 and peak DAU of approximately 131,000. ASA sold approximately 1.2 million units with average DAU of approximately 120,000 and peak DAU reaching over 155,000.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

Across ARK Mobile, average DAU was approximately 129,000, while total downloads exceeded 13 million. We are also pleased with the progress we have made in executing our ARK content pipeline. Starting in May, we released the ARK Fantastic Tames Season One pack, which included three DLC creatures: Burrowbuck, Cerberax, and Enigmasaur. Burrowbuck was available at launch, while the latter two creatures are scheduled for release during the third and fourth quarter, respectively, to extend the pack's content cadence through year-end.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

More recently, early July marked the return of the iconic Genesis Part 1 DLC to ASA and the Unreal Engine 5 experience. In tandem with Genesis, we released ARK: Tides of Fortune, a new premium expansion that transformed the Genesis ocean into a massive map-wide natural frontier. Alongside these two DLC releases, we also shadow-dropped ARK: Dragontopia. Content for the Dragontopia DLC will be released in phases throughout 2026, with DLC owners expected to receive included content updates throughout Q3 and Q4.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

Together, these launches further expanded the ASA experience and established a strong foundation for the additional ARK content planned through 2027. Beyond ARK, we officially launched Bellwright on PlayStation and Xbox during the second quarter. Bellwright originally launched in 2024 as an early access Steam title and has since achieved over 1 million lifetime units sold, over 46.4 million playtime hours, and maintained a very positive Steam rating for the past two years. The strong and established Steam following carried into the console launch as well.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

Following the launch on console platforms, Bellwright reached the top five paid games list on Xbox and earned strong early user ratings on both PlayStation and Xbox. Additionally, during the first 30 days after the console launch, combined console DAU demonstrated positive early engagement, suggesting console monetization potentials. During a relatively measured second quarter for new game and content releases, Bellwright sales helped support our overall performance.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

More importantly, its success reinforces our confidence in expanding beyond the ARK IP. Our rich history in the sandbox survival genre continues to support our broader diversification strategy, and we remain focused on growing this portfolio as we evaluate new investments and pipeline opportunities. Operationally, we are pleased to report a new initiative through our subsidiary, Egofold, which is focused on the development of our new AI technology. Just last week at the Ai4 conference, we introduced the AI Ranch initiative and unveiled a new product called the Non-Human Player, or NHP.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

At its core, NHP is an AI companion designed for gamers. Unlike traditional NPCs or scripted bots, NHP is intended to behave, learn, and adapt like a real human teammate to ultimately create a personalized and dynamic AI partner through a player's gaming journey. What makes NHP unique is its approach to understanding games. Rather than relying on scripts, APIs, or game modification, NHP observes the game the same way a human player would.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

It watches the screen, interprets what is happening in real-time, understands players' objectives, environments, and user interfaces, develops a plan, and then executes actions through standard keyboard and mouse inputs. Over time, the technology is designed to learn from each user's play style and preference, creating an increasingly personalized companion experience. Our vision is for NHP to accompany users across multiple game titles, helping them not only enjoy games more, but also improve their skills and shorten the learning curve when entering new games.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

We believe this technology has the potential to address several common challenges faced by both casual and hardcore gamers. These include difficulties finding reliable teammates, frustrations with inconsistent multiplayer experiences, the repetitive nature of content grinding, and the time required to learn increasingly complex games. NHP is being developed to serve as an AI partner that adapts to each player's individual goals and preferences to help elevate the overall gaming experience.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

To illustrate the concept, imagine a virtual pet that can play chess against you, learn how you play, and help you improve your game. That is the type of personalized consumer experience NHP aims to deliver. This new initiative reflects a broader effort to expand Snail's growth platforms while staying anchored in the communities, creators, and gameplay experiences that define our core business.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

As we move through the second half of the year and into 2027, we are pairing this new initiative with a clear slate of gaming content designed to sustain engagement, broaden our portfolio, and support long-term revenue diversification. As we look ahead to the rest of the year, our gaming content pipeline is well-defined. Across ARK, we have phased releases planned for the Fantastic Tames Pack and Dragontopia DLC throughout Q3 and Q4. In addition, ARK Maker, our content creation tool, and the return of ARK: Survival of the Fittest are slated for launch in the second half of 2026.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

At IGN Live in June, we unveiled a teaser trailer for ARK Maker as we continued preparing for the tool's official launch, and also released new details about the upcoming ARK animated series ahead of part two's return to Paramount+. We are also pleased to share updates across the PixARK franchise. In addition to PixARK Worlds, which we unveiled in March, we recently announced the upcoming PixARK: Terracrypt DLC.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

Terracrypt marks the largest paid DLC expansion for PixARK and is planned to introduce more than 200 hours of gameplay, 80 new creatures, and a vast new environment designed to extend player progression and exploration opportunities within the PixARK universe. We were pleased to showcase a playable demo at the ChinaJoy event as we are preparing to launch the DLC this fall. With much of the upcoming ARK content centered around ASA, we are pleased to include PixARK's largest paid DLC expansion into our pipeline as well.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

Lastly, we are pleased to highlight continued progress across our three highly anticipated AAA titles in development: For The Stars, 9 Yin Sutra: Immortal, and 9 Yin Sutra: Wushu. In April, we released a new developer diary for For The Stars, offering an in-depth look at the upcoming game's development progress, new pre-alpha footage, and unreleased concept art. We also plan to showcase For The Stars at the upcoming Gamescom event later this month, alongside ASA, Bellwright, Honeycomb, and another internally developed AAA title.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

In addition, 9 Yin Sutra: Immortal headlined our attendance at the ChinaJoy event, making its public debut at the event. We released a new trailer alongside the game's official Steam page, marking a significant moment in the title's development cycle ahead of its release. As a reminder, the two 9 Yin Sutra titles currently in development builds on established Age of Wushu IP, which has a loyal fan base in China.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

9 Yin Sutra: Immortal will aim to deliver an open world sandbox cultivation experience aligned with current Chinese gaming market trends and preferences while introducing a new experience to that established community. To reiterate, the three AAA titles in our pipeline continue to represent a significant growth driver for Snail. These titles mark an important step in diversifying beyond the ARK IP and establishing new, lasting franchises at a larger scale than we have historically pursued.

[Peter Kang, SVP and Director of Business Development and Operations at Snail, Inc]

As we advance these projects towards launch, we are focused on building durable communities, expanding our addressable audience, defining ourselves as a multi-franchise developer and publisher, and positioning Snail for a broader portfolio of long-term growth opportunities. Thank you for joining us today. I will now turn the call over to Heidy to discuss our financial results for the second quarter ended June 30, 2026. Heidy?

[Heidy Chow, CFO at Snail, Inc]

Thank you, Peter, and good afternoon, everyone. Thank you all for joining us today as I review our financial results for the second quarter and six months ended June 30, 2026. Net revenue for the quarter was $19.7 million, compared to $22.2 million in the same period last year. The decrease was primarily due to a $4.2 million decrease in sales of ASA, $1.8 million decrease from ASE, $400,000 decrease from ARK Mobile, $200,000 decrease from SaltyTV, and $200,000 decrease of other various titles, offset by a $1.5 million revenue increase from Bellwright and $2.8 million change in deferred revenues.

[Heidy Chow, CFO at Snail, Inc]

Net revenue for the six months ended increased 11% to $47 million, compared to $42.3 million in the same period last year. The increase was primarily due to a $3.6 million increase in sales of Bellwright and a $5.3 million change in deferred revenues, partially offset by a decrease in ASE revenue of $2.7 million and a decrease of $1.4 million attributable to lower sales of ASA. Net loss for the quarter improved to loss of $3 million, compared to a net loss of $16.6 million in the same period last year.

[Heidy Chow, CFO at Snail, Inc]

The improvement is primarily due to the absence of the $14 million income tax provision recorded in the prior year and an improvement in gross profit, partially offset by higher G&A and R&D expenses. Net loss for the six-month period improved to a loss of $900,000, compared to a loss of $18.5 million in the same period last year. The improvement was primarily due to the absence of the $12.4 million income tax provision recorded in the prior year period, which resulted from the valuation allowance recognized against the company's deferred tax assets, together with a $6.5 million improvement in gross profit.

[Heidy Chow, CFO at Snail, Inc]

EBITDA for the quarter was loss of $3 million, compared to a loss of $2.4 million in the same period last year. The slight decrease was primarily due to an increase in net income of $13.5 million and a decrease in depreciation expenses of $100,000, offset by an increase in the provision of income taxes of $14 million. EBITDA for the six months period increased 88.8% to a loss of $600,000, compared to a loss of $5.8 million in the same period last year.

[Heidy Chow, CFO at Snail, Inc]

The increase was primarily due to a decrease in net loss of $17.6 million, offset by a decrease in provision for income taxes of $12.4 million. Total units sold for the quarter were 2 million, compared to 2.1 million in the same period last year. The slight decrease was due to a decrease in sales of ARK Franchise IP by 200,000 units, partially offset by an increase in sales of Bellwright of 100,000 units. Total units for the six-month period increased 500,000 to 4.2 million, compared to 3.7 million in the same period last year.

[Heidy Chow, CFO at Snail, Inc]

The increase was primarily due to increased sales of ASA of 1 million units and an increase in Bellwright sales of 200,000 units, partially offset by a decrease in ASE sales of 700,000 units. Bookings for the quarter was $21.8 million, compared to $27.1 million in the same period last year. The decrease was primarily due to lower sales of ASE and ASA, partially offset by booking generated from Bellwright. Bookings for the six-month period decreased slightly to $48.7 million, compared to $49.4 million in the same period last year.

[Heidy Chow, CFO at Snail, Inc]

The slight decrease is primarily due to lower sales of ASE as the title continued to mature and consumer demand shifted towards ASA and its related downloadable content, offset by increased sales of ASA and Bellwright, which benefited from promotional pricing during the period. Lastly, as of June 30th, 2026, unrestricted cash was $13.3 million compared to $8.6 million as of December 31st, 2025. 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 at Snail, Inc]

We would like to emphasize that our Q2 results reflect the timing shift of our ARK: Tides of Fortune and our ARK: Genesis Part 1 Ascended, both of which launched in early July rather than in June of 2026, as originally scheduled. As a result, the related contribution moved into the third quarter. As a reminder, we expect to recognize approximately $11 million from our deferred revenue balance in connection with the launch of ARK: Genesis Part 1 Ascended DLC. In addition to sales from ARK: Tides of Fortune in the third quarter of 2026. Additionally, we launched the ARK: Fantastic Tames Season 1 pack in May 2026.

[Heidy Chow, CFO at Snail, Inc]

Because the pack includes three creatures that are being released in phases, we did not recognize all revenue generated from the DLC in the second quarter. One of the three creatures was delivered to DLC owners at launch, while the remaining two are scheduled for releases in Q3 and Q4. Accordingly, we recognize 1/3 of the sales related to the ARK: Fantastic Tames pack in Q2 and expect to recognize the remaining 2/3 as the additional creatures are released in Q3 and Q4, respectively. ARK: Dragontopia shadow drop in July 2026 alongside ARK: Tides of Fortune and ARK: Genesis Part 1 Ascended. Owners of the ARK: Dragontopia DLC will receive included content updates throughout Q3 and Q4.

[Heidy Chow, CFO at Snail, Inc]

Thus, similar to revenue recognition treatment for the ARK: Fantastic Tames Season 1 pack, the Dragontopia revenue will be recognized in phases during Q3 and Q4 as those content updates are delivered to DLC owners. The portion of revenue associated with content that has not yet been delivered is and will be reflected in our deferred revenue balance through Q3.

[Heidy Chow, CFO at Snail, Inc]

The successful July launches of these DLCs, together with the robust gaming pipeline Peter previously outlined, and additional planned content releases in Q3 and Q4, position us well to build momentum through the remainder of the year. Lastly, turning to our stablecoin initiative, our USDO coin continues to make encouraging progress towards launch readiness. We have been building the platform infrastructure required to support wallet management, minting and burning, blockchain transfers, and KYC verification.

[Heidy Chow, CFO at Snail, Inc]

We are also engaging proactively with regulators, and our money transmitter license applications have been submitted across multiple states. Our vision for USDO includes multiple distribution channels operating in parallel. We are also evaluating a real-world on-ramp through the deployment of crypto ATMs in California to start. As with our exploration of AI, we believe stablecoin technology represents an opportunity to extend our technological capabilities into new markets and develop additional revenue streams that can strengthen the business over time.

[Heidy Chow, CFO at Snail, Inc]

The July DLC launches, the scheduled rollout of additional DLC content, our robust gaming pipeline, new business initiatives, together with the continued progress on USDO, give us multiple avenues to build momentum through the remainder of 2026. This concludes our prepared remarks. We will now open the line for Q&A. As a reminder, some answers during the Q&A session may be answered in Chinese by our CEO before being translated into English. Operator, please proceed.

[Operator]

Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment for questions. Our first question comes from Michael Kupinski with Noble Capital Markets. You may proceed.

[Michael Kupinski, Analyst at Noble Capital Markets]

Thank you for taking the questions. Good evening, everyone. Q2 was the first quarter under the reduced ARK licensing fee structure, and I know that you quantified that there would be approximately $1.5 million of quarterly savings. How much of that was realized in the quarter? If maybe you could just talk a little bit about whether or not you are, at this point, retaining that savings or are you reinvesting it elsewhere in the business?

[Heidy Chow, CFO at Snail, Inc]

Hi, Michael. Thanks for the question. In Q2, as you mentioned, from April of 2026, we started to have We save on the licensing fee of approximately $500,000 on a monthly basis, which is about $1.5 million. We are actually, for the money that we save, of course, we are reinvesting that into our future games as well our in-home development. But the savings definitely improve on our company's gross profit. As you can see from Q2, although revenue actually decreased, but gross profit actually increased.

[Michael Kupinski, Analyst at Noble Capital Markets]

Got you. Your current deferred revenue increased to $28.5 million. I know that you said that you plan to recognize, I think, $11 million in the third quarter. I was just wondering if you could just give us some thought about revenue recognition over the next few quarters.

[Heidy Chow, CFO at Snail, Inc]

Of course. This is Heidy again. Because we have to recognize our revenue according to accounting standard codification 606. When we have a performance obligation that we have not met yet, we will have to defer the revenue. Some of our game, when we have a content that we have not released it yet, we will have to record that as a deferred revenue. Once the game is released, then we'll turn the deferred revenue to revenue. A big portion on our balance sheet right now related to deferred revenue are actually a component from the ASA release.

[Heidy Chow, CFO at Snail, Inc]

When we released ASA back in 2023, there was also five maps that were attached with the ASA. Genesis one and Genesis two were part of the map. Genesis one was released beginning of July of 2026. Which means that because of few days of delay, we were not able to recognize that in Q2 as revenue, which it won't. As of right now, we already know it got released, so it will be recognized as Q3 revenue in related to Genesis one.

[Michael Kupinski, Analyst at Noble Capital Markets]

Got you. Thanks, Heidy. The gross profit margins obviously are higher, but the Q2 operating expenses also increased. I was wondering if it sounds like your second half is going to be really strong on the revenue side. I was just wondering if you can maybe give us some thought about how the expense run rate looks for the second half and maybe the current R&D levels. Are they kind of approaching the peak as these AAA titles advance through the development at this point?

[Heidy Chow, CFO at Snail, Inc]

Yeah. Most of our investment to our future development game are closing to the end right now. We also not anticipated to have significant amount of increase in the future quarters for the new games that we will be launching. Our G&A expenses is also is consistent quarter-over-quarter. So we're expecting a consistent G&A expenses and also R&D expenses. We're not expecting any significant changes quarter-over-quarter.

[Michael Kupinski, Analyst at Noble Capital Markets]

If I can just slip one last one in. On your stablecoin, what are the next hurdles at this point for rollout?

[Heidy Chow, CFO at Snail, Inc]

In regards to our stablecoin right now is for management, we are already submitted our application to the various states that we choose to conduct business in those states. The application has already been submitted. We're waiting to hear back from the state upon their review of the application.

[Michael Kupinski, Analyst at Noble Capital Markets]

Got you. All right. That is all I have for now. Thank you.

[Heidy Chow, CFO at Snail, Inc]

Thank you, Michael.

[Operator]

Thank you. This concludes Snail, Inc.'s second quarter 2026 conference call. If your question was not taken, please contact Snail, Inc's IR team at snail@gateway-grp.com. Thank you for your participation. You may now disconnect.

Participants

Executives

• Peter Kang, SVP and Director of Business Development and Operations
• Heidy Chow, CFO

Analysts

• Steven Shinmachi, Investor Relations Associate at Gateway
• Michael Kupinski, Analyst at Noble Capital Markets