Snail, Inc. Class A Common Stock Q3 FY2026 earnings call

• Core ARK Franchise Performance: Engagement remained consistent across the ARK franchise in Q1 2026. Strong ASA sales were driven by the Steam Winter Event and continued momentum from the successful December 2025 launch of the ARK Lost Colony DLC. A full pipeline of ARK content updates and new releases is scheduled through 2027, maintaining ARK as the foundational revenue-driving IP for the business. The company amended its ARK: Survival Ascended exclusive software license agreement, reducing annual licensing fees by $6 million going forward, with savings reinvested into new AAA title development.
• Expansion of Indie Portfolio: The company continues to expand its indie game offerings, with three new titles released recently and two more in active development, supporting steady pipeline diversification.
• AAA Title Pipeline Strategic Progress: The company's long-term strategy is to evolve from an ARK-dependent studio to a fully integrated multi-franchise developer and publisher. Three AAA titles are now in the final phase of development, each targeting distinct audiences: 1) For the Stars: A galactic-scale conquest/grand strategy game with hands-on exploration, construction, and progression, designed to appeal to both hardcore and mainstream audiences; new developer diaries and pre-alpha footage have been released, with additional announcements planned for 2026 ahead of launch. 2) Nine Yin Sutra: Wushu: A direct sequel to the popular Age of Wushu built on Unreal Engine 5, targeting long-time fans of the original IP in China; more details will be released at Gamescom 2026. 3) Nine Yin Sutra: Immortal: A new cultivation-genre (Wuxia-adjacent) title built on Unreal Engine 5, targeting the fast-growing cultivation game segment in China; more details will be released at Bilibili World and ChinaJoy 2026. The two-product strategy for the Nine Yin Sutra IP broadens the addressable audience to both long-time fans and new players.
• New Business Line Development: 1) SaltyTV: The short vertical drama business has grown rapidly to 279 IPs, with plans to add interactive drama-games in Q3 2026, targeting 1 million unit sales for the first two interactive titles. 2) USDO Stablecoin: The stablecoin business has completed core platform infrastructure development and is in internal testing, with compliance and licensing work progressing ahead of launch.

Snail, Inc. reports aggregate overall financial performance for Q1 2026, with performance broken out by core ARK franchise segments: 1. ARK: Survival Evolved (ASE): Sold over 573,000 units in Q1 2026, with an average daily active users (DAU) of 117,000 and peak DAU of 143,000. Revenue decreased year-over-year compared to Q1 2025. 2. ARK: Survival Ascended (ASA): Sold 1.4 million units in Q1 2026, with an average DAU of 127,000 and peak DAU of 188,000. Drove $4.2 million of year-over-year net revenue growth. Upon release of the ASA remake of ARK Genesis Part 1, the company will recognize approximately $11 million in previously deferred revenue. 3. ARK Mobile: Had approximately 11.9 million total downloads as of quarter-end, with average DAU of over 141,000. Revenue decreased year-over-year compared to Q1 2025. 4. Bellwright: Contributed $2.1 million of year-over-year net revenue growth, driven by strong momentum from a late 2025 content update. 5. Indie Games: Three new indie titles (Echoes of Elysium, Survivor Mercs 1.0, Above the Snow) were released in recent months, with two additional indie titles (Dead Party, Gobby Gang) in development. 6. SaltyTV (Short Vertical Drama/Interactive Content): Has 400,000 total app downloads, over 6,000 paid subscribers, and a library of 279 total IPs as of May 12, 2026. 7. Stablecoin (USDO): Business is in late pre-launch development, no revenue recognized yet. Aggregate Q1 2026 company results: Net revenue = $27.3 million (+35.7% YoY), net income = $2.1 million (vs a net loss of $1.9 million YoY), EBITDA = $2.4 million (+173.3% YoY vs a $3.2 million loss YoY), total units sold = 2.2 million (+42.6% YoY), bookings = $26.9 million (+21.1% YoY), unrestricted cash = $14.3 million (up from $8.6 million at end-2025).

• Management reaffirms that the robust ARK content pipeline will deliver sustainable performance throughout 2026.
• Management expects the company's revenue mix will evolve significantly as the three upcoming AAA titles launch over the next several years, and remains bullish on the long-term upside potential of these titles.
• Specific upcoming release guidance: The Fantastic Tames Season 1 Expansion Pack for ASA will launch in May 2026; ARK Tides of Words DLC and the ASA remake of ARK Genesis Part 1 will launch in June 2026; Bellwright console ports for PlayStation and Xbox, the indie title Gobby Gang, six additional licensed IP releases, and the first two SaltyTV interactive games are all planned for 2026, with the interactive games launching in Q3 2026; ASA Dragontopia is planned for December 2026 launch. No changes to prior full-year 2026 financial guidance were announced.

• Forward-looking statements related to pipeline development, new business launches, and future financial performance are inherently uncertain, and actual results may differ materially from expectations due to unknown risks and operational uncertainties.
• The three large-scale AAA titles are still in development, with no guarantee of commercial success or market acceptance post-launch, and near-term revenue contributions are not guaranteed.
• The stablecoin business is dependent on successful completion of regulatory licensing across multiple U.S. states, with no guarantee of approval or successful commercial launch.
• New non-gaming business lines (SaltyTV, stablecoin) are in early stages of development, and their long-term revenue contribution potential remains unproven.

Q: Analysts asks for an overview of the 2026 content roadmap, the cadence of ARK releases over the next 12 months, and which upcoming launches are the top catalysts for bookings growth. / A: Management confirms ~11 internal releases are planned for 2026, including multiple ARK content updates (Fantastic Tames Season Pack, Bob's True Tales, ASA Genesis Part 1, rerelease of ASA Survival of the Fittest, ASA World Creators, and December 2026 launch of ASA Dragontopia), Bellwright console ports, the indie title Gobby Gang, and 6 additional licensed IP releases. Core ARK content is the primary near-term bookings growth catalyst.

Q: What is the current status and outlook for the SaltyTV short video/vertical drama business? / A: As of May 12, 2026, SaltyTV has 279 total IPs (5.7x growth in content), over 6,000 paid subscribers, and 400,000 total app downloads across iOS and Android. Management added that SaltyTV plans to launch 2 interactive drama-games combining video content and gameplay in Q3 2026, with an internal projection of 1 million total unit sales for the two titles.

Q: What level of 2026 development spending should investors expect, and when will operating expenses moderate after the current AAA development cycle? / A: Management stated the company remains cost-conscious while developing the AAA pipeline and does not expect excessive increases in operating expenses, leveraging existing internal development teams effectively.

Q: What is the latest update on the USDO stablecoin business? / A: Core platform functionality (wallet management, minting/burning, transfers, KYC) is functionally complete, and full internal testing of the associated digital marketplace is underway. Money transmitter license applications are progressing across multiple U.S. states, compliance frameworks are being finalized, and the business plans to launch across three channels: the company's proprietary gaming digital goods platform, a crypto ATM network for on-ramp purchases, and a third distribution channel.