Q4 2023 Snail Inc Earnings Call
Thank you for standing by and welcome to still Incorporated's fourth quarter and full year 2023 earnings conference call and webcast I would now like to turn the call over to trick Bassano Vice President at ICR. Please go ahead.
Jake Pisano: Good afternoon, and welcome to Snap, Inc. 's fourth quarter and full year 2023 earnings conference call and webcast.
Jake Pisano: On today's call are Jim <unk>, Chief Executive Officer, and Heinie Chow Chief Financial Officer.
Jake Pisano: By now everyone should have access to the company's fourth quarter and full year 2020, Great earnings press release filed today after market close.
Jake Pisano: This earnings press release is available on the Investor Relations section of snail eggs.
Jake Pisano: Website at Www dot snail, dot com.
During this call management may make forward looking statements regarding future events and the future financial performance of the company.
Jake Pisano: Actual events and results may differ materially from our expectations and forward looking statements are subject to the risks and uncertainties.
Jake Pisano: Please refer to the company's most recent 10-Q10-K and other SEC filings.
Jake Pisano: The company makes these forward looking statements as of today and disclaims any duty to update them.
Jake Pisano: On today's call, we will refer to bookings and EBITDA, which are non-GAAP financial measures provide useful information for the company as investors.
Jake Pisano: You will find the historical reconciliation of bookings and EBITDA to the corresponding GAAP measures in the earnings press release, and the company's SEC filings.
And now I will turn the call over to Jim.
Jim: Thank you Jay and Hello, everyone. It's a pleasure to speak with you about our fourth quarter and full year results, we had a great year and accomplished many things, including releasing up survival ascendant, releasing an improved product roadmap announcing exciting initiatives like the al Qaeda Ambassador program and using artificial intelligence to bolster our.
Jim: Offerings in October we released the highly anticipated ox survival ascendant gain since then we have sold more than one 5 million copies and lost more than $97 5 million gameplay hours. Our community is still captivated by the <unk> experience and we continue to improve that came with exciting DLC update since it is.
Jim: The launch of survival ascend it has had an average teu or daily active users of 182000, which is a healthy increase of four times. The average <unk> observed during the same period of the original survival default launch increased <unk> reflects our commitment to creating an enjoyable experience for our player base, we are making.
Jim: Significant progress on our strategy to build communities attract and retain new and existing players and continue growing our player base. We also planned new DLC for the franchise, which are coming to us survival ascend at all news about this will be released soon the up franchise will be reaching new heights coming up in late March our enemies.
<unk> will be released by a well known streaming platform parallel class initially in the North American region and globally. Two weeks later the notoriety of the IP will reach a new generation of players and we are planning marketing campaigns to capitalize on this newfound reach the fact that sandbox survival gains at a top rated currently with a plethora of new co op.
As games entering the market in this genre, we still stand alone at the top of the multi play a level along with our technological advancements in our premium not a program that provides and this content based on user generated content as the user base of sandbox. The vehicle gains continues to grow up will continue to be the standard by which other caines measure although.
Jim: While we continue to innovate on gameplay and technology, keeping us on the frontier of innovation for this game and genre. We are excited to start 2024 with an improved product roadmap last year with the emergence of AI technology now I'll begin to research how AI can impact our production pipeline, we sought ways to reduce development time, while maintaining a.
Jim: High quality standards, we quickly found that AI was progressing rapidly in this sector AI generated <unk> assets, we adapted to this by training opportunity concept artist and using emerging AI technologies and to the state and more than doubled our <unk> concept our team's production capabilities. The results of this at our development projects.
Jim: And dramatically reduce the time between ideation and implementation as we look forward into the near future. We are now sampling emerging AI technology in the next step of the development pipeline, where <unk> has produced into three the assets in this step we have already identified several technologies that has shown great promise and we are confident that within.
Jim: The year, they will be ready for direct use in our production pipeline for prototyping and <unk> concept. The two main tools being researched a messy and AI, both progressing NII generated <unk> assets in the future. We will witness the emergence of AI actors can replace some development team members in a common goal they can add.
Jim: As a complete development team such as coders artists designers and project managers and marketing members independently operating they can take feedback from social media and pass it directly into the development process to be evaluated and implemented into the <unk> project. This AI agents can work together as a team to generate again <unk>.
Jim: The two main tools, we are researching in this sector, a chat and society of brain Baidu brain. The industry is trying to hang onto the hand crafted model and compare gains made by AI tools to those made by factories at scale, we want to use AI, while making high quality gains reducing costs and passing the savings onto our consumers.
Jim: We look forward to the developments, we make during the year and we'll continue sharing more information on our upcoming quarterly earnings calls I will now hand, it over to highly to review our financial highlights from the quarter.
Holly: Thank you Tim.
Holly: Hello, everyone and thank you for joining our fourth quarter and full year call.
Holly: Net revenues for the three months ended December 31st 2023, It was $28 6 million as compared to $15 3 million in the three months ended December 31st 2022.
Holly: The increase in net revenues.
Primarily due to the release of arc survival attended.
Net revenue for the year ended December 31, 2023 decreased by $13 5 million to 69 million.
Holly: Or 18, 2%.
Compared to $74 four muni in the prior year period.
The decrease in net revenue was due to the decrease in arc and mobile sales of $2 9 million.
Holly: Greece in one time deferred revenue from contracts recognized in 2022, a pinpoint three millennium.
Holly: One time payments in 2022 of $8 5 million that did not occur in 2023, and the increase in deferred revenue of $25 2 million related to <unk> sales.
Holly: From the outset by a increase in sales of $32 7 million.
Holly: Net income for the three months ended December 31, 2023 of what's true for me only compared to the net loss of $2 3 million for.
Holly: For the three months ended December 30, <unk> 2022.
Holly: The increasing nightly income due to the release of Barack survival attended reduced general and administrative expenses up 2.5 units and a decreased professional fees related to compliance with public company requirements and litigation related expenses.
Holly: Partially offset by increased advertising and marketing costs of 900000 related to arc survival extended release.
Holly: And then $3 9 million decrease in the income tax benefit for the period.
Holly: Net loss was $9 1 million for the full year ended December 31st 2023, as compared with net income of 1 million for the year ended December 31st 2022.
Holly: Representing a decrease of $10 1 million.
Holly: Bookings for the three months ended December 31, 2023, it was $52 6 million as compared to 11 9 million for the three months ended December 31st 2022.
Holly: The increase was due to the strong release arc survival are centered on the theme.
Holly: Base station and Xbox platform.
Holly: Okay for the year ended December 31, 2023 was $85 7 million as compared to $63 7 million in the year ended December 31 2022.
Holly: The increase was due to the release of arc survival a center in the fourth quarter of 2023.
Holly: In addition to the increased sales of arc survival ascended.
Holly: The company for approximately 22 million in revenues during the fourth quarter of 2023 for the arc survival ascended DLC that have not yet Bbs and <unk> pinpoint 3 million in one time deferred contract revenue recognized in 2022 that didn't.
That occurred in 2023.
Holly: Earnings before interest taxes, depreciation and amortization EBITDAR for the three months ended December 31st 2023 increased by eight 8 million or 169% as compared to the three months ended December 31st 2022.
Holly: The increase was primarily the result of an increase in net income of $4 7 million, partially offset by an increase in provision for income taxes of $3 9 million.
Holly: EBIT decreased by 9 million compared to the year ended December 31st 2022, primarily as a result of a decrease in net income of $10 1 million, partially offset by a decrease in interest income of 700000 and the increase in interest.
Holly: <unk> of 600000.
Holly: As of December 31, 2023, unrestricted cash was $15 2 million versus $12 9 million as of December 31st 2022.
Holly: To review our detailed financial statements. Please refer to the earnings press release, our most recent 10-Q and our 10-K filing.
None: Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
None: All information tone will indicate your line is in the question queue.
None: You May press Star two if you would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Your first question comes from Pat Mccann with Noble capital. Please go ahead.
Patrick McCann: Hey, Thanks for taking my questions. My first question was just about the animated series I'm wondering if you could.
Patrick McCann: Give any information on how that has been received so far and maybe you could also touch on the animated series DLC as well.
Patrick McCann: Okay.
Patrick McCann: Hi.
Patrick McCann: This is Jim <unk> CEO.
Jim: No game.
Jim: To answer the question related to animated series I think by far we already know that our enemies series D for Steven the episode has been <unk>.
Jim: And in video streaming platform.
Jim: We already received.
Jim:
Jim: I would say a positive review.
Jim: Also the.
Jim: The critic and the score has been quite promising.
Jim: And I.
Jim: I think the.
Jim: Another benefit from releasing the video on the video streaming platform is that it has provided a free promotion and marketing too.
Jim: <unk> outside of the art vans.
Jim: So they can understand.
Jim: What the story is wrapped around them for.
Jim: For the the art survival Eval video game, that's a great health and benefits for the south.
Jim: Our survival you Bob.
Jim: <unk> back in.
Jim: 2015 domestic game.
Jim: Fans haven't heard about it and then they review did animation and then they may cure is it may start from the.
The math again and going on TLC.
Jim: The other question on the animated.
Jim: DLC.
Jim: We are planning and.
And then.
Jim: We don't have the exact day and news to Vietnam.
Jim: We are working on that and expect to have a.
Jim: More.
Visible.
Jim: And schedule.
Jim: And the information.
Jim: They come in for them.
Jim: Coming days.
None: Thank you and then my next my next question.
None: It was given the the the Mod revenue sharing program I was just wondering how you know.
None: How the marketing has.
None: Has there been an uptick in marketing you know what are you seeing right now and so far as Martina is concerned with the game.
None: Okay. Yeah. Thank you. This is Jim again. Thank you for the question. So are we talking about modern this is very exciting news because before we hop into onto the plot.
None: Platform.
We are already doing the math program for five six years in the past and if you look at the the the the.
None: Current silver occupation.
None: Is that to the 50 or 60% of your more was we call it private server, which it would be very popular in the matter that they are playing the or are in their own version.
None: The only like 10 15, a little bit about his official silver that we provided in the past which is to provide the great potential to be on.
None: The modest system right. So right now the model the model.
None: Platform, we provided it's not it's still the same features and a more enhanced tool for the model to be able to.
None: Utilize whatever the data and the features in that tool, but also it open up for the monetization.
None: Not for that not just for the company, but also older creator of the content creator. So it's exciting news, but this is just beginning.
Other than the product cycle in the past. This is will be a new trajectory in the coming days and we expect that you will be alone.
None:
None: <unk> strategy and also our monetization.
None: Long term monetization for the franchise.
None: Okay, Great and then if I could ask one more question I was just I was wondering if you could comment any on the any updates in the development of arc too when you look at potential release.
None: You know what quarter, you might want to release it and you know when Youre looking at late 2020 for early 2025 I was just wondering how much flexibility you might have to kind of pick pick a time to release it that makes most sense as far as user adoption I'm thinking.
None: Thinking about like in Q4 with the Christmas holiday, how are you viewing that and how much flexibility do you have when it comes to re leasing our two.
None: Yes, thank you for the questions.
None: Yes, there was a lot of question a wrap around the word is out to coming out even or especially after the extended release and also the animated theoretical reasons you see older.
None: The voice over.
How kind of the voice over and diesel was actually in the op. Two trailer. So you see the connection the team is working very hard.
Tried to have the up to release already but as we may know because there was.
None: Long time for the after the Bible and send it and then definitely the App too has the highest bar that the quality has super C.
The deposit and even the epicenter. So we don't have a set date.
None: I think it would have a more clear schedule.
None: And come in mountains.
None: <unk>.
None: I can say for now, but it definitely would be.
None: Good news and information.
None: In coming days.
None: Great. Thank you so much that's all I've got.
None: Once again, if he would like to ask a question. Please press star one on your telephone keypad.
None: There are no further questions at this time. This concludes today's teleconference. You may disconnect your lines and thank you for your participation.
None: Okay.
Okay.
None: [music].