Snail, Inc. Class A Common Stock Q1 FY2026 earnings call

• Core ARK Franchise Performance & Roadmap

  • ARK franchise engagement remained stable in Q1 2026, with strong ASA sales driven by the December 2025 Lost Colony DLC launch and the Steam Winter sale. ARK Mobile has maintained consistent daily active user engagement.
  • Confirmed a multi-month content roadmap for ARK Survival Ascended (ASA) stretching through 2027, with upcoming releases including the Fantastic Canes Season 1 Expansion Pack in May 2026, the Tides of Fortune DLC, the Genesis Part One remake in June 2026, a re-release of the Survival of the Fittest esports mode, the ASA World Creator tool, and the Dragotopia DLC in December 2026.
  • The company amended its ARK Survival Ascended exclusive software license agreement, reducing annual licensing fees by $6 million going forward, with savings to be reinvested in new title development.

• Diversified Pipeline Strategy & AAA Title Development

  • The company's long-term strategy is to evolve from an ARK-focused studio to a fully integrated multi-franchise developer and publisher, with three AAA titles now in the final phase of development. These titles target distinct audiences and do not compete with one another.
  • For the Stars: A galactic-scale grand strategy exploration title, combining elements of Eve Online, No Man's Sky, and Satisfactory. The game is built to support a limitless explorable universe, with an initial launch focused on single-player and small-group co-op, and a long-term vision of a shared MMO ecosystem. Additional announcements are planned throughout 2026.
  • Two-product Nanyan Sutra franchise strategy for the Chinese market: Nanyan Sutra Wushu is a direct Unreal Engine 5 MMORPG sequel to the studio's foundational Age of Wushu IP (which has 85 million registered accounts) targeting long-time fans, with updates planned for Gamescom 2026. Nanyan Sutra Immortal is a new Unreal Engine 5 title targeting the fast-growing cultivation sub-genre, with updates planned for Bilibili World and China Joy 2026. This dual strategy is designed to expand the IP's total addressable audience and support multi-decade franchise lifespan.

• New Business Line Expansion

  • Salty TV (short vertical drama): Expanded to 279 total IPs as of 2026 (a 5.7x increase) via internal development and acquisition, with over 400,000 app downloads. The business is pursuing a combined content strategy of vertical dramas plus interactive games, with two interactive games planned for Q3 2026 launch, targeting 1 million total unit sales to supplement near-term revenue from large-scale AAA development.
  • USDO stablecoin business: Has completed core platform development (wallet, mint/burn, transfers, KYC) and is progressing on money transmitter license applications across multiple U.S. states. Internal full marketplace testing is underway, with launch planned via three channels: the proprietary Noise Digital Warehouse gaming goods platform, and a CryptoATM network for on-ramp purchases.

The company does not break out formal financial performance by separate product segments in this call. Key segment-level sales metrics are as follows:

1. ARK Franchise: Total ARK-related units sold in Q1 2026 were 1.973 million, accounting for ~89.7% of the company's total 2.2 million units sold for the quarter. ASE sold 573,000 units; ASA sold 1.4 million units; ARK Mobile ended the quarter with 11.9 million total downloads. ARK franchise revenue contributed $4.2 million in net revenue growth year-over-year, the largest driver of overall top-line growth.
2. Indie & Other Third-Party/Licensed Titles: Bellwright contributed $2.1 million in net revenue growth year-over-year, with 200,000 additional units sold compared to Q1 2025. Three new indie titles (Echoes of Elysium, Survivor Mercs 1.0, Above the Snow) were released in the quarter, with two additional indies (Dead Party, Gabi Game) in development. Six additional licensed IP titles are scheduled for release in 2026.
3. New Business Segments: Salty TV (short video/vertical drama) had over 400,000 total app downloads and over 6,000 paid subscribers as of May 12, 2026, with 279 total IPs. The USDO stablecoin business is in pre-launch development, with no revenue recognized in the quarter.

• Management reaffirmed that strong ARK fundamentals and its full 2026 content pipeline will support sustained performance throughout the full year 2026, maintaining the company's growth trajectory that began in Q4 2025.
• No formal full-year financial guidance was provided, but management confirmed it remains cost-conscious during AAA development, with no expected extreme spike in operating expenses.
• Management expects the company's revenue mix will shift significantly over the next several years as the three new AAA titles launch, and highlighted meaningful upside potential for these new franchises.
• All confirmed 2026 launch timelines for content (ASA DLC, Bellwright console ports, Salty TV interactive games, AAA title reveals) were maintained with no upward or downward revisions during the call.

No explicit discussion of material business risks, operational failures, or downside challenges was included in the prepared remarks or Q&A portion of the call. Management only referenced general risk factors that are already disclosed in the company's standard SEC filings for forward-looking statements.

Q: Michael from Noble Capital Markets asked for an overview of the full 2026 content roadmap, the cadence of ARK releases, and the key catalysts for bookings growth this year. / A: King confirmed 11 internal releases scheduled for 2026, including multiple ARK content updates, the full slate of ASA releases outlined in prepared remarks, Bellwright console ports, the new indie title Gabi Game, plus six additional licensed IP releases throughout the year. No specific new catalysts beyond the already announced AAA development and 2026 ARK slate were highlighted.

Q: Michael asked for an update on the Salty TV short video business, including current metrics and future outlook. / A: King stated that Salty TV had reached 279 total IPs as of 2026, 5.7x growth from prior periods, with over 400,000 total app downloads and over 6,000 paid subscribers. Management added that Salty TV is pursuing a combined vertical drama/interactive game strategy, with two interactive games launching in Q3 2026 that are expected to sell over 1 million units, and will provide supplementary near-term revenue while large AAA titles are in development.

Q: Michael asked what level of 2026 development spending investors should expect for the AAA pipeline, and when operating expenses will moderate after development concludes. / A: Chow responded that the company remains cost-conscious during development, and is not expecting an extreme spike in operating expenses as it advances the AAA pipeline. No specific timeline for moderating expenses was provided.

Q: Michael asked for an update on the USDO stablecoin business, including regulatory progress. / A: King confirmed that core platform functionality (wallets, minting/burning, transfers, KYC) is functionally complete, and money transmitter license applications are progressing across multiple U.S. states. Internal full marketplace testing is underway, and the first launch will go live on the company's proprietary Noise Digital Warehouse gaming goods platform, with a crypto ATM network for real-world on-ramps also in internal prototype testing.