Snail, Inc. Class A Common Stock Q3 FY2025 earnings call

• Stablecoin project: Making meaningful progress in developing infrastructure and advancing through multistate regulatory application process, positioning the company as a pioneer in the gaming stablecoin space. - Gaming business: Units sold up, ARC engagement stable, Salty TV released 67 short film dramas, launched narrative-driven simulation title The Fame Game: Welcome to Hollywood, Lost Colony presales strong with ~306,000 units sold, targeting December 4 release of Echoes of Elysium, and development of new games like Genesis One and Two in 2026.

For the third quarter of 2025, Snail, Inc.'s net revenue was $13.8 million compared to $22.5 million in the same period last year. The decrease was due to revenue recognition timing rather than fundamental business changes. Gaming business units sold increased 7.8% year-over-year for the quarter, with total units sold for the nine-month period up 38.7% to 4.8 million. ARC mobile title had over 9 million downloads. Bookings for the third quarter grew 9.3% to $17.6 million, and for the nine months ended 09/30/2025, bookings increased 14.3% to $67 million. The stablecoin project is making progress in developing underlying infrastructure and advancing through the multistate regulatory application process.

• Fourth quarter to be positively impacted by the launch of ARC Survival Ascended DLC Lost Colony, with expected recognition of $5.8 million deferred revenue from Lost Colony presales. - 2026 to see development of multiple new games and content across established and indie titles.

• Stablecoin project relies on industry-wide adoption, which may take time. - Revenue recognition timing can affect quarterly top-line results. - Fixed license fee to related party impacts gross profit margin.

Q: Could you talk about the gross margins in the quarter?

A: This was due to multiple factors including a fixed license fee of approximately $6 million per quarter to a related party, which is fixed regardless of recognized revenue, and deferred $5.9 million in sales of Lost Colony. Additionally, a significant sale in 2025 pulled demand forward for the base game of ASE.

Q: Talk about the timing of deferred revenue recognition over the next twelve months?

A: We expect to recognize $26.5 million of the deferred revenue balance within the next twelve months. Specifically, $5.9 million related to Lost Colony will be recognized in 2025, and $10.3 million related to Genesis One and Two will be recognized in the upcoming year.