Financial Data and Key Metrics Changes - Net revenue for Q3 2025 was $13.8 million, down from $22.5 million in the same period last year, primarily due to an increase in deferred revenue of $10.9 million [16][18] - Net loss for Q3 2025 was $7.9 million compared to a net income of $233,000 in the same period last year, driven by decreased net revenue and increased expenses [18] - Bookings for Q3 increased by 9.3% to $17.6 million compared to $16.1 million from the same period last year [19] Business Line Data and Key Metrics Changes - Total ARK sales increased by $2.2 million compared to the same period last year, while Salty TV sales increased by $300,000 [16] - Units sold for the gaming business increased by 7.8% year over year, with total units sold for the nine-month period rising 38.7% to 4.8 million [10] - Average daily active users (DAU) for ARK: Survival Evolved and ARK: Survival Ascended reached approximately 122,658 and 92,876, respectively [10] Market Data and Key Metrics Changes - Deferred revenue balance as of September 30, 2025, was $36.4 million, with $35.3 million due to non-refundable payments [17] - The company expects to recognize approximately $26.5 million of deferred revenue within the next 12 months, with $5.8 million expected to be recognized in Q4 2025 [17][18] Company Strategy and Development Direction - The company is pursuing a stablecoin project to position itself as a pioneer in digital payments within the gaming industry, viewing stablecoins as the future of digital transactions [5][6] - Upcoming growth drivers include the launch of ARK: Lost Colony and the anticipated release of Echoes of Elysium on December 4, 2025 [14][15] Management's Comments on Operating Environment and Future Outlook - Management noted that the decline in net revenue was primarily due to timing of revenue recognition rather than a reduction in sales or demand [7] - The company remains optimistic about a stronger Q4, driven by the upcoming launch of new content and continued engagement across its gaming portfolio [9][22] Other Important Information - The company participated in several industry events to drive awareness of its titles, including Gamescom and TwitchCon [11] - The interactive film segment has seen growth, with 67 short-film dramas released through the Salty TV app [12] Q&A Session Summary Question: Can you discuss the gross margins in the quarter? - The decrease in gross margin was attributed to fixed license fees and deferred revenue from Lost Colony sales [23][24] Question: Can you elaborate on the timing of deferred revenue recognition? - Most deferred revenue is expected to be recognized within the next 12 months, with $5.9 million related to Lost Colony expected in Q4 2025 [25][26] Question: What does the remaining deferred revenue consist of? - The majority of deferred revenue is related to gaming performance obligations and some deposits for future games [27][28]

Core Insights - Snail Games demonstrates robust growth in its entertainment portfolio through new releases and industry recognition, highlighting its stable expansion in diversified business models [1] - The company continues to develop its core IP series, enhancing the content and interactive ecosystem of the ARK series, which is driven by community co-creation [1] - The upcoming launch of the RPG game "Echo: Airship Legends" on December 4, 2025, adds to Snail Games' impressive lineup of products [1] Game Development and Releases - Snail Games' independent publishing brand, Wandering Wizard, expands its global portfolio with unique game offerings, showcasing the creativity of international developers [2] - The fast-paced shooting game "Rebellion Engine," developed in collaboration with Argentine studio Seven Leaf Clover, is now available on Steam, blending 90s-style gunplay with intense melee combat [2] - "Above the Snow" received the "IGN Editors' Choice Award for Best Polish Game" at the 2025 Poznań Game Show, further solidifying Wandering Wizard's global influence [2] Interactive Content and Recognition - Snail Games' short drama division, Interactive Films, gains industry attention through its content platform Salty TV, with three works recognized by the International Short Drama Association [3] - "My Ex's Bestfriend" won the "Best Revenge-Driven Narrative" award, "Hollywood Heartthrob" received the "Most Charismatic Screen Presence" award, and "Faux Fiance" was honored with the "Best Destiny-Bound Narrative" award [3] - These achievements position Interactive Films as a promising emerging sector within Snail Games' diversified strategy, tapping into the rapidly growing vertical content market [3] Strategic Development - The collective achievements highlight Snail Games' strategic momentum across multiple entertainment sectors, expanding revenue sources and enhancing brand influence [4]

Core Insights - Snail, Inc. continues to show steady growth across its entertainment portfolio through new content launches and industry recognition [1] - The company is strengthening its core franchise and enhancing community engagement within its ARK ecosystem [2] - Snail's indie publishing branch, Wandering Wizard, is expanding its global portfolio with unique projects and has received industry accolades [3] - The Interactive Films division is gaining recognition for its short-form storytelling platform, Salty TV, with multiple awards for its titles [4] - Overall, these achievements reflect Snail's strategic momentum across various entertainment sectors, diversifying revenue streams and enhancing brand visibility [5] Gaming and Publishing - The 'ARK x Teenage Mutant Ninja Turtles' Cosmetic Pack collaboration emphasizes the importance of mod content for sustaining engagement with ARK: Survival Ascended [2] - The upcoming airship building RPG, Echoes of Elysium, is set to release on December 4, 2025, marking a significant addition to Snail's gaming portfolio [2] - Wandering Wizard's collaboration with Argentina-based studio Seven Leaf Clover for the launch of Rebel Engine on Steam showcases the branch's commitment to diverse gaming projects [3] Interactive Films - Salty TV's titles, including My Ex's Bestfriend, Hollywood Heartthrob, and Faux Fiance, received recognition from the International Short Drama Association, highlighting the division's potential [4] - The awards for Salty TV's titles include Best Revenge-Driven Narrative and Most Charismatic Screen Presence, indicating strong audience engagement potential [4] Strategic Momentum - The combination of efforts in gaming, publishing, and digital storytelling illustrates Snail's strategy to diversify revenue streams and strengthen brand visibility [5]

Core Insights - Snail, Inc. is enhancing its presence in the short drama sector through its Vertical Entertainment division, Interactive Films, which has submitted the short drama "Hollywood Heartthrob" to the International Short Drama Awards, following the success of "Red Talons" [1][4] - The short drama market has grown significantly, surpassing $8 billion globally, with the U.S. emerging as a key market, accounting for 49% of global revenue in Q1 2025 despite only 8% of downloads [3] Group 1: Company Developments - Interactive Films has developed a mobile-first approach with its Salty TV platform, focusing on storytelling and a paid-access model, having released 67 short film dramas [2] - The submission of "Hollywood Heartthrob" aims to position Salty TV as a leading platform in the U.S. for short-form drama, bridging international content with domestic demand [4] Group 2: Industry Trends - The short drama sector has transitioned from experimental to commercially viable, with the U.S. market showing significant potential for growth, indicated by the disparity between downloads and spending [3] - Salty TV's participation in industry awards is intended to validate its creative quality and foster partnerships that enhance the global reach of premium short-form content [4]

Company Performance - Snail, Inc. (SNAL) reported first-quarter 2025 results with earnings and revenues exceeding the Zacks Consensus Estimate, although the bottom line declined compared to the prior-year quarter [1] - The company reported an adjusted loss per share of 6 cents, which was narrower than the consensus estimate of a loss of 11 cents, and compared to an adjusted loss of 5 cents in the prior-year quarter [4] - Quarterly revenues reached $20.1 million, surpassing the consensus mark of $18 million by 11.7%, and increased by 42.5% from $14.1 million in the year-ago quarter [5] User Engagement and Sales - Daily active users on Steam and Epic platforms increased by 16% year over year to 243,000, driven by new content releases for the ARK franchise [2] - Bookings totaled $22.2 million, up from $19.6 million in the prior-year quarter, attributed to the release of ARK: Survival Ascended DLC and previous launches [6] Financial Highlights - Gross profit for the quarter was $5.8 million, compared to $2.1 million in the prior-year quarter, while the net loss was $1.9 million, slightly higher than the $1.8 million loss reported in the prior-year quarter [7] - EBITDA for the quarter was a loss of $3.2 million, compared to a loss of $1.9 million in the prior-year period, influenced by various factors including an increase in income tax benefit [8] Strategic Initiatives - The company signed a memorandum of understanding with Mega Matrix to co-develop at least 10 short dramas, and soft-launched Salty TV to diversify content offerings beyond gaming [3] - Snail aims to expand its global footprint and deliver innovative cross-platform experiences across gaming and entertainment throughout 2025 [3] Balance Sheet - As of March 31, 2025, cash and cash equivalents amounted to $9.3 million, an increase from $7.3 million as of December 31, 2024 [9]