Snail, Inc. Class A Common Stock Q4 FY2025 earnings call

Peter Kang mentioned 2025 was a momentum building year for ASA with key milestones like Lost Colony DLC launch. 2026 plan includes releasing four major DLCs and content updates for ASA, with details on Ark World Creator, Ark Bob's True Tales Tides of Fortune, etc. Also, updates on indie portfolio including new title Gobby Gang, Bellwright reaching 1 million units sold and its console ports in 2026, and progress on three AAA projects. Heidi Chow reviewed financial results, mentioning net revenue changes, net loss changes, EBITDA changes, and total units sold growth

Fourth quarter: ASA delivered strong performance with approximately 692,000 units sold, an average DAU of over 91,000 and a peak DAU of over 147,000. ASE had approximately 580,000 units sold in the quarter, average DAU of roughly 105,000 and peak DAU of about 137,000. ArcMobile surpassed 10 million cumulative downloads and sustained an average DAU of approximately 130,000. Full year: Total units sold increased 32.7% to 6.3 million compared to 4.7 million units in the same period last year. Fourth quarter net revenue was $25.1 million compared to $26.2 million in the same period last year, a decrease primarily due to deferred revenues recognized. Sequentially, Q4 net revenue increased 82% from Q3 2025. Full year net revenues were $81.2 million compared to $84.5 million in the same period last year, decrease due to deferred revenue decrease offset by other sales increases. Fourth quarter net loss was $900,000 compared to net income of $1.1 million in the same period last year. Full year net loss was $27.2 million compared to net income of $1.8 million in the same period last year. EBITDA for fourth quarter was lost $1.3 million compared to $1.6 million in the same period last year. Full year EBITDA was lost 16.8 million compared to 3.2 million in the same period last year

Bookings for fourth quarter increased to 20.8 million compared to 17 million in the same period last year, and full year bookings increased 16.2% to $87.8 million. Expect booking to continue growing on a quarterly basis while adjusting for gradual content launches. 2026 and 2027 represent an exciting period with ARK's content pipeline and upcoming AAA titles having upside potential

Technical challenges during engine transformation, such as issues with Flexi Engine compared to Unreal Engine in rendering and efficiency, and uncertainties regarding community feedback on game releases

Q: What is the ending deferred revenue balance in the quarter?

A: Around $30 million.

Q: Is the technology gap still persistent?

A: No, upgraded to Unreal Engine 5.7 and no technical gap now.

Q: Launch window for AAA games?

A: Internal studios expanded, three internal projects with development progress, For the Stars to start external testing by end of 2026, others to be tested this year and showcased in major events.

Q: Impact of margins and marketing spend cadence?

A: Revenue growth expected 20%-30% higher than last year, growth from multiple projects including Bellwright console release, Studio Sirens' work, etc.