Q1 2025 Snail Inc Earnings Call
Operator: Thank you for standing by and welcome to Snail Inc's first quarter 2025 earnings conference call and webcast.
Thank you for standing by and welcome to smell Inc's first quarter 2025 earnings conference call and webcast I would now like to turn the call over to Steven It shouldn't Matthew with Investor Relations. Thank you and good afternoon, everyone. Welcome to smell Inc's first quarter 2025 earnings conference call and webcast.
Stephen Shinmaki: I would now like to turn the call over to Stephen Shinmaki with Investor Relations. Thank you and good afternoon everyone. Welcome to Snail Inc's first quarter 2025 earnings conference call and webcast.
Stephen Shinmaki: Joining us for today's call are Snail Inc's co-CEO, Tony Tian, Senior Vice President, Director of Business Development and Operations, Peter Kang, and Chief Financial Officer, Heidi Chow. The company's first quarter 2025 earnings press release was filed earlier today and is available on the Investor Relations section of Snail Inc's website at www.snail.com or the SEC's website at www.sec.gov. During this call, management may make forward-looking statements regarding future events and the future financial performance of the company.
Matthew: Joining us for today's call are sale aims to co CEO, Tony can senior Vice President director of business development and operations, Peter King and Chief Financial Officer, Heidi Chow the company's first quarter 2025 earnings press release was filed earlier today and is available on the Investor Relations section of Snap, Inc. 's website.
Matthew: At Www dot snail, dot com or the Sec's website at Www Dot FCC Dot Gov Slash Edgar.
Speaker Change: During this call management may make forward looking statements regarding future events and the future financial performance of the company.
Stephen Shinmaki: Actual events or results may differ materially from our expectations, and forward-looking statements are subject to certain risks and uncertainties. Please refer to the company's Form 10-Q that has been filed with SEC, the most recent Form 10-K that was filed with SEC on March 26, 2025, and other SEC filings.
Speaker Change: Actual events or results may differ materially from our expectations are forward looking statements are subject to certain risks and uncertainties.
Speaker Change: Please refer to the company's Form 10-Q that are filed with the FCC. The most recent Form 10-K that was filed with that D. C. On March 26, 2025, and other SEC filings.
Stephen Shinmaki: The company may make these forward-looking statements as of today and disclaims any duty or obligation to update them or to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any statement is based. Additionally, on today's call, we refer to bookings and EBITDA, which are non-GAAP financial measures and provide useful information for the company's investors. We will find the historical reconciliation of bookings and EBITDA to the corresponding GAAP measures in the earnings press release and the company's SEC filing.
Speaker Change: The company May make these forward looking statements as of today and disclaims any duty or obligation to update them or to release publicly any updates or revisions to any forward looking statements to reflect any change in its expectations or any change at events conditions or circumstances on which any statement is based.
Speaker Change: Additionally, on today's call, we refer to bookings and EBITDA, which are non-GAAP financial measures and provide useful information for the companys investors.
Speaker Change: You'll find the historical reconciliation of bookings and EBITDA to the corresponding GAAP measures in the earnings press release, and the company's SEC filings.
Tony Guillen: And now I will turn the call over to Tony Guillen, Co-Chief Executive Officer of Snail. Sir, please proceed. Thank you and good afternoon, everyone. Thank you for joining us today to review our financial and operating results for the first quarter ended March 31st, 2025. The first quarter saw a strong growth across our top line, delivering revenues of $20.1 million, a 42.5% increase compared to Q1 2024. Our bookings also grew 13.6% to $22.2 million compared to the same period last year. And our total units sold increased 45% to 1.5 million, primarily driven through our flagship ARC franchise.
Tony: And now I will turn the call over to Tony again.
So chief Executive officer of snail, Sir Please proceed.
Tony: Thank you and good afternoon, everyone. Thank you for joining us today to review, our financial and operating results.
Tony: First quarter ended March 31st 2025.
Tony: The first quarter saw strong growth across our top line delivering revenues of 21 million, but 42, 5% increase compared to Q1 2024.
Tony: Bookings also grew 13, 6% to $22 2 million compared to the same period last year.
Tony: And our total units sold increased 45% to one 5 million, primarily driven through our flagship <unk> franchise.
Tony: Franchise.
Tony Guillen: Following the successful launch of the Extinction DLC and Top 3 of Bob's Tall Tales DLC last quarter, we were excited to introduce the Astro's Map for Ark Survival Ascendant. This new content brings a unique twist. Deeped in Greek mythology, offering players a fresh and immersed experience. player engagement across the ARC franchise continues to remain strong. As of March 31, 2025, ARC has been played for 4.0 billion cumulative hours, with the average playing time per user reaching 162 hours.
Tony: Following the successful launch of the extinction DRC and top three all box hotels DRC last quarter.
Excited to introduce the S chose map well Ark survival is sending it.
Tony: This new content.
Tony: Unique twist.
Tony: In Greek mythology, offering players are fresh and immersed experience.
Tony: Player engagement across the franchise continues to remain strong.
Tony: March 31, 2025 arc has.
Tony: Has to be played for planes you billion cumulative hours.
Tony: Every screen time per user at reaching 162 hours.
Tony Guillen: In late December of last year, we marked a significant milestone in expanding the ARC universe with the launch of ARC Ultimate Mobile Edition. The response has been exceptional. Since launch, the mobile title has surpassed 4.8 million downloads across iOS and Android platforms as of March 31st, 2025. In the three months ended March 31st, 2025, ARC Ultimate Mobile Edition had an average DAU of approximately 144,000. We recently expanded the mobile experience folder with the release of two fan-favorite maps. Ragnarok, and Extinction, and we remain committed to delivering fresh content to this rapidly growing segment. Mobile continues to be a key growth area for the ARC franchise, effectively lowering the hardware barrier to entry and expanding our reach to a broader global audience.
Tony: In late December of last year, we marked a significant milestone in expanding the universe.
Tony: With the launch of <unk>, our two major mobile edition the.
Tony: The response has been exceptional.
Tony: Since launch the mobile title has surpassed $4 8 million downloads.
Tony: Ross iOS and Android platforms as of March 31, 2025.
Tony: In the three months ended March 31 2025.
Tony: Our teammate mobile edition.
Tony: Had an average D AUO approximately 144000.
Tony: We recently expanded our mobile experience.
Tony: The release of a true finance everything maps.
Tony: Retina rock and extinction.
Tony: We remain committed to delivering fresh content. So this rapidly growing segment.
Tony: Mobile continues to be a key growth area for the <unk> franchise.
Tony: Effectively lowering the heartbeat.
Tony: Barrier to entry and expanding our reach to a broader global audience. We also attended the 2025.
Tony Guillen: We also attended the 2025 Game Developer Conference, or GDC, this past March.
Tony: Game divestiture conference on DTC. This past March Peter will dive deeper into what we what was reviewed during the event.
Tony Guillen: Peter will dive deeper into what was reviewed during the event, but I'm excited to announce new upcoming content and DLCs for the ARC franchise, activities, and content celebrating ARC's 10-year anniversary. The Review of Two New Internally Developed Projects and Showcasing Several New Titles that Will Expand Our Growing Portfolio of Games.
Speaker Change: But I'm excited to announce new.
Speaker Change: Our main content in D C, but the Ark franchise activities and content celebrating <unk> 10 year anniversary.
Speaker Change: The review of two new internally developed projects and showcasing several new titles that will expand our growing portfolio of games.
Tony Guillen: Beyond traditional gaming, we also announced an encouraging announcement with our subsidiary, Interactive Films, the division at Snail that focused on creating content in the vertical short film segment of the digital entertainment market. And the Interactive Films Division is our very own short film mobile distribution platform, Saute TV, which hosts 49 short film dramas as of this quarter end. just the last month.
Speaker Change: Beyond the traditional gaming, we also announced an encouraging announcement with our subsidiary interactive fumes the division and nailed that focused on creating content in the vertical short film segment of the digital entertainment market.
Speaker Change: And the indirect and films Division.
Speaker Change: Very own short few more mobile distribution platform <unk>.
Speaker Change: <unk> TV, which holds 49 short team dramas as of this quarter end.
Speaker Change: Yes, the last month.
Tony Guillen: We signed an MOU with Magmatrix, Inc., a publicly traded entity under the NYSE America, which operates a similar platform to ours for the Flex TV, a short video streaming platform that produces and hosts short dramas. Under this MOU, both parties have committed to co-developing at least 10 short dramas. Both parties will leverage their respective strengths to establish a comprehensive collaboration framework for the joint development, production, and global distribution of short dramas through our respective platforms to reach audiences across North America, Southeast Asia, and other global regions. This includes a collaborative effort on the creative direction and the script development of the short dramas.
Speaker Change: We signed an Mou with mathematics, Inc.
Speaker Change: <unk> traded entity and the NYSE American.
Speaker Change: Which operates a seamless platform two hours, but reflects television.
A short video streaming platform that produces and host short dramas.
Speaker Change: And that base Mou both parties.
Speaker Change: I've committed to co developing at least 10 short drama.
Speaker Change: Both parties will leverage their respective strengths is to establish a comprehensive collaboration framework for the joint development production and global distribution of short dramas.
Speaker Change: We expect two platforms.
Speaker Change: Rich audiences across North America.
Speaker Change: Eastern Asia and other global regions.
Speaker Change: This includes a collaborative effort.
Speaker Change: The creative direction and the script to development of the short dramas.
Tony Guillen: jointly overseeing production progress and budgeting and providing an avenue for both organizations to broaden reach by tapping into each other's audience. This partnership is strategic and ideal for both parties as we both continue to expand our content portfolio and grow our presence in the global short drama industry. By combining Micromagic's established production and distribution capabilities with our expertise in AI and immersed storytelling, we remain committed to accelerating this portion of business and expanding our portfolio of short dramas on the Salty TV platform.
Speaker Change: Jointly overseen production progress and budgeting.
Speaker Change: And providing an avenue for both organizations to broaden reach by tapping into each other's audience.
Speaker Change: This partnership is strategic and ideal for both parties.
Speaker Change: We both continue to expand our content portfolio and grew our presence in the global short drama industry.
Speaker Change: By combining mathematics established production and distribution capabilities.
Speaker Change: Our expertise in AI and immersive storytelling, we remain committed to.
Speaker Change: Accelerating this person or business and expanding our portfolio of short dramas on the salt pay TV platform.
Tony Guillen: remain committed to delivering fresh content and experiences that engage our audience and players across multiple platforms and genres.
Speaker Change: And they'll remain committed to delivering.
Speaker Change: <unk> content and experiences that engage our audience and the players across multiple platforms.
Peter Kang: With that, I will now hand it over to Peter who will provide updates to the ARC franchise, speak to the upcoming 10-year anniversary of ARC Survival Evolved, our expanding game portfolio, and additional new information that was reviewed at GDC. Peter? Thanks, Tony, and good afternoon, everyone. As many of you know, June 2025 will mark the 10-year anniversary of our flagship title, ARK Survival Evolved. What began as an ambitious sandbox survival game with dinosaurs, robust taming mechanics, and deep crafting systems has evolved into a global franchise with a passionate player base and a thriving creative content ecosystem.
John Ross: John Ross with that I will now hand, it over to Peter who will provide updates.
Peter: So the <unk> franchise.
Peter: The upcoming upcoming 10 year anniversary of ox survival evolved.
Peter: Expanding game portfolio and additional new information that it was reviewed S GTC either.
Speaker Change: Thanks, Tony and good afternoon, everyone. As many of you know June 2025 will Mark the 10 year anniversary of our flagship title <unk> survival revolt.
Speaker Change: What began as an ambitious sandbox survival game with dinosaurs robust training mechanics deep crafting systems.
<unk> into a global franchise with a passionate player base and a thriving creative content ecosystem looking.
Peter Kang: Looking back, ARK Survival Evolved was more than just a game launch. It was a bold step into an up-and-coming genre that demanded innovation, risk-taking, and a close relationship with our community. From the early days of early access to the full release and the many expansions that followed, ARK has continuously pushed boundaries and adapted to new platforms, new technologies, and new player expectations. In the past 10 years, we've expanded the art universe across PC, console, and mobile, brought cinematic storytelling and voice talent to the forefront and connected millions of players worldwide.
Speaker Change: Looking back or survival evolved was more than just the game launch it was a bold step into an up and coming jogger that demanded innovation risk, taking and a closer relationship with their community.
Speaker Change: From the early days of early access to the full release.
Speaker Change: Many expansion followed forecast continuously push boundaries and adapted to new platforms, new technologies and new player expectations.
Speaker Change: In the past 10 years, we've expanded the art universe across PC console and mobile cinematic.
Speaker Change: Cinematic storytelling voice talent to the forefront.
Speaker Change: Millions of players worldwide.
Peter Kang: At the heels of the 10-year anniversary, we unveiled several exciting updates for the ARC franchise at this year's Game Developers Conference. The first was the reveal of a teaser trailer for Ark Aquatica, giving attendees an early look at the upcoming expansion map. The new map introduces a significant change in gameplay, with roughly 95% of the environment taking place underwater. The expansion reflects our continued efforts to diversify gameplay and evolve the ARK experience as the franchise approaches its 10-year milestone. The new DLC map is expected to launch in the coming month.
Speaker Change: At the heels of the 10 year anniversary, we unveiled several exciting updates for the <unk> franchise at this year's game developers conference.
Speaker Change: The first was the reveal of the teaser trailer for Oracle Quantico.
Speaker Change: Attendees, an early look at the upcoming expansion met.
Speaker Change: The new map introduces a significant change in gameplay with roughly 95% of the environment taking place underwater.
Speaker Change: The expansion reflects our continued efforts to diversify gameplay and evolve the Arctic experience as the franchise approaches its 10 year milestone.
Speaker Change: The new DLC map.
Speaker Change: Expected to launch in the coming months.
Peter Kang: We also unveiled the official trailer for ARK Lost Colony, the next major DLC for ARK Survival Ascended. This new expansion is being produced by Studio WELCORD. expected to launch at the end of the year. We're proud to collaborate with such a respected and talented studio and are committed to delivering high quality content for players of ASA.
Speaker Change: We also unveiled the official trailer for arc, let's call it.
Speaker Change: The next major POC for our survival ascended.
Speaker Change: This new expansion is being produced by a studio wildcard.
Speaker Change: Expected to launch at the end of the year, we're proud to collaborate with such a respected and talented studio and are committed to delivering high quality content for players.
Speaker Change: Hey.
Peter Kang: As Tony mentioned earlier, we recently launched two new maps for ARK Ultimate Mobile Edition, expanding the game's content and enhancing the mobile experience for our players. Looking ahead, we plan to release additional expansion maps, including Genesis Part 1 and Part 2 later this year, as part of our ongoing efforts to support and grow the mobile platform. A mobile launch last year marked a transformational milestone for the ARC franchise, enabling us to reach a broader audience that was previously limited by hardware requirements.
Tony: As Tony mentioned earlier, we recently launched two new maps or arc Ultimate mobile edition spending the game's content and enhancing the mobile experience for our players.
Tony: Looking ahead, we plan to release additional expansion maps, including Genesis part, one and part two.
Speaker Change: Later this year as part of our ongoing efforts to support and grow the mobile platform.
Speaker Change: But mobile launched last year Mark.
Speaker Change: <unk> formation or milestone for the Arctic franchise, enabling us to reach a broader audience that was previously limited by hardware requirements.
Peter Kang: Mobile has become a vital sector in the gaming industry, and ARK Ultimate Mobile Edition now allows us to engage a completely new segment of players and continue to drive franchise growth across multiple platforms. Beyond these major content updates, we're also preparing a series of additional releases and announcements as part of our broader plans to commemorate the franchise's 10 year anniversary.
Speaker Change: Mobile has become a vital sector in the gaming industry.
Speaker Change: <unk> also been mobile edition now allows us to engage a completely new segment of players and continue to drive franchise growth across multiple platforms.
Speaker Change: Beyond these major content updates were also preparing a series of additional releases and announcements as part of our broader plans to commemorate the franchise's 10 year anniversary.
Peter Kang: On to Bellrite. Last month, we celebrated the one-year early access anniversary of the game. The feedback from launch has been exceptional. As of Q1's end, we sold over 417,000 units, and the Steam wishlist count remains over one million. To celebrate this milestone, we introduced a major update into the game with new content and player-requested features that commitment to the long-term support for the game.
Bill: Onto Bill right last month, we.
Speaker Change: We celebrated the one year early acts as the anniversary of the game.
Speaker Change: Feedback from launch has been exceptional.
Speaker Change: Q1 said, we sold over 417000 units and the steam wish list remains over 1 million sellers.
Speaker Change: Celebrate this milestone.
Speaker Change: <unk> a major update into the game with new content and cleared requested features that reflect our commitment to the long term support for the game.
Peter Kang: We're especially excited to bring Bellrite to the Xbox platform in Q4 of 2025. Opening the experience to an even broader audience and continuing our efforts to make the game accessible across multiple channels. The upcoming console launch represents a significant achievement in our roadmap and reflects our ongoing commitment to cross-platform expansion and reaching a wider player base.
Speaker Change: We're especially excited to bring bell right to the edge.
Speaker Change: Box platform in Q4 of 2025.
Speaker Change: Opening the experience to an even broader audience and continuing our efforts to make the game accessible across multiple channels.
Speaker Change: The upcoming console launch represents a significant achievement in our roadmap and reflects our ongoing commitment to cross platform expansion.
Speaker Change: Reaching a wider player base.
Peter Kang: Outside of Ark and Bellrite, we made several other announcements to upcoming games. We debuted teaser trailers for Nine-Yin Sutra Wushu and Nine-Yin Sutra Immortal, which are two in-house developed projects. We also showcase new trailers for upcoming games such as For the Stars, Honeycomb, The World Beyond, Robots at Midnight, and Echoes of Elysium.
Speaker Change: Outside of arc and belt right.
Speaker Change: We made several other announcements two upcoming games.
Speaker Change: Debuted a teaser trailers for 90 in Sutra, Wushu and 90 in Sutra immortal.
Speaker Change: Which are two in house developed projects.
Speaker Change: We also showcased new chillers for upcoming games, such as for the stars honeycomb the world beyond robots at midnight and echoes of Elysium.
Peter Kang: Our indie publishing label, Wandering Wizard, launched two new titles this quarter and recently acquired the publishing rights to Whispers of Westgrove, an upcoming psychological horror game developed by NVNT Studios, and Rebel Engine, a hack and slash with the speed and gunplay of a 90s first-person shooter developed by Seven Leaf Clover out of Buenos Aires, Argentina. The continued growth of Wandering Wizard reflects our larger goal of diversifying our creative output, expanding into new genres, and partnering with a wider range of independent developers strengthens our position in the indie publishing space and supports our long-term vision of building a more diversified and resilient entertainment portfolio.
Speaker Change: Our indie publishing label wondering lizard launched two new titles this quarter.
Speaker Change: So when we acquired the publishing rights to whispers of West group and the upcoming psychological horror game developed by <unk> Studios.
Speaker Change: And rebel engine.
Speaker Change: Slash with the speed income player with <unk> first person shooter developed by seven leaf Clover, Aldo Buenos Aires, Argentina.
Speaker Change: The continued growth of wandering Wizard reflects our larger goal of diversifying our creative output expanding into new genres, and partnering with a wider range of indie developers strengthens our position in the publishing space and supports our long term vision of building a more diverse.
Speaker Change: Slide and resilient entertainment portfolio.
Peter Kang: With a strong lineup of upcoming titles and new content for the Ark franchise, along with additional content tied to the 10 year anniversary, we remain committed to delivering fresh, engaging experiences for our players, and in turn, driving returns for our shareholders.
Speaker Change: With a strong lineup of upcoming titles and new content for the art franchise, along with additional content tied to the 10 year anniversary, we remain committed to delivering fresh.
Speaker Change: Engaging experiences.
Speaker Change: For our players.
Speaker Change: And then in turn driving returns for our shareholders.
Heidi Chow: With that, I will now turn the call over to Heidi to discuss our financial results.
Speaker Change: I will now turn the call over to <unk> to discuss our financial results.
Heidi Chow: Heidi. Thank you, Peter. And hello, everyone. Thank you for joining us today.
Speaker Change: Thank you Peter and Hello, everyone. Thank.
Speaker Change: Thank you for joining us today.
Heidi Chow: I'm pleased to share the details of our financial results for the first quarter and March 31, 2025. Net revenue for the first quarter was $20.1 million, a 42.5% increase compared to $14.1 million in the same period last year. The increase was primarily due to an increase in total ARC sales of $2.7 million, an increase in ARC mobile sales of $1.3 million, and the company preferring $3.3 million less sales during the first quarter of 2025 compared to the same period last year. We deferred less revenue this quarter as the majority of all survival-extended DLCs have been released.
Speaker Change: Please be assured that details our financial results for the first quarter ended March 31st 2025.
Speaker Change: Net revenue for the first quarter was 21, the only here.
Speaker Change: To your 0.5%.
Speaker Change: Compared to 14 point why don't you own an industry. Thank you peer.
Speaker Change: The increase was primarily due to an increase in total sales of $2 seven muni.
Speaker Change: The increase in mobile sales at $1 3 million and.
Speaker Change: And the company defined $3 3 million less out during the first quarter of 2025.
Speaker Change: Think of it last year.
Speaker Change: With deferred revenue this quarter as the majority of our survival extended DLC has been written.
Heidi Chow: Requiring a lower percentage of each off-survival ascended cell to be deferred in 2025.
Speaker Change: Requiring a lower percentage of each of our survival I think has been different in 2025.
Heidi Chow: Net loss in the first quarter was $1.9 million compared to a loss of $1.8 million in the same period last year as a result of the aforementioned increase in net revenue offset by increase in cost of revenue and operating expenses, a result of our increase in headcount, research and development, and marketing expenses. Bookings for the 3-month end of March 31, 2025 increased 13.6% to $22.2 million, compared to $19.6 million from the same period last year. The increase was primarily due to the release of Arch Survival Ascended DLC Estraros this quarter and the release of Bob's Tall Tales and Bell Rite in the later quarter of 2024.
Speaker Change: Net loss in the first quarter was $1 9 million compared to a loss of one 8 million in the same.
Speaker Change: Last year.
Speaker Change: The result of the aforementioned phase.
Speaker Change: Net revenue offset by increase in cost of revenue and operating expenses.
Speaker Change: Result of our increasing headcount research and development and marketing expenses.
Speaker Change: Okay great.
Speaker Change: And at March 31st 2020.
Speaker Change: So 6% to 22 point, Germany earlier.
Speaker Change: <unk> to $19 six ammonia from the same period last year.
Speaker Change: The increase was primarily due to the release of arc survival attended <unk>.
Speaker Change: Now this quarter and the release of Bob pop health and they'll write in the later quarter of 2024.
Heidi Chow: If it does, for the quarter end of March 31st, 2025 was a loss of $3.2 million compared to a loss of $1.9 million in the prior year period. The decrease was primarily due to an increase in benefits on income taxes of $1 million. a decrease in interest expenses of $300,000 and an increase in net loss of $100,000, partially offset by a decrease in interest income and interest income related parties of $100,000.
Speaker Change: EBITDA for the quarter ended March 31st 2025.
Speaker Change: Loss of $3 2 million compared to a loss of one nine <unk> in the high <unk>.
Speaker Change: The decrease was primarily due to an increasing benefit from income taxes of one pneumonia.
Speaker Change: A decrease in interest expenses at 300000.
Speaker Change: And the increase in net loss of 100000 plus.
Speaker Change: Partially offset by a decrease in interest income and interest income related party of a 100 out there.
Heidi Chow: As of March 31, 2025, unrestricted cash and cash reequivalent was $9.4 million.
Speaker Change: As of March 31, 2025.
Speaker Change: Cash and cash equivalent was $9 4 million.
Heidi Chow: To review our detailed financial statements, please refer to the earnings press release and the Form 10-Q file with the SEC.
Speaker Change: She will review our detailed financial statements. Please refer to the earnings press release, and the Form 10-Q filed with the SEC.
Heidi Chow: Before I hand the call back to the operator for the Q&A session, I would like to take a moment to address the current tariff landscape and share a brief overview of our key goals and strategy opportunities for 2025. We believe that the direct impact of tariffs on our business is likely to be limited. However, indirect effects may still influence our business. These include a potential rise in the price of console platforms like Xbox and PlayStation, which could defer new players who don't yet own a console. Additionally, increased hardware costs and broader economic uncertainty stemming from tariffs may deepen overall consumer spending, including on premium gains.
Speaker Change: Before I hand, the call back to the operator for the Q&A session I would like to take a moment to address the current tariffs landscape can you share a brief overview of our key goals or stress.
Speaker Change: Strategic opportunities for 2025.
Speaker Change: We believe that the direct impact of tariffs on our business that's likely to be limited.
Speaker Change: However, indra.
Speaker Change: They influence our business.
Speaker Change: These include a potential rise in the price of a console platforms Xbox.
Speaker Change: Boston, Playstation which could be for a new player who don't yet own a council.
Speaker Change: Additionally, increased heartland comp and broader economic uncertainty stemming from tariffs may keep them overall consumer spending.
Speaker Change: <unk> premium game.
Heidi Chow: That said, PC gaming accounted for approximately 48% of our revenue in 2024, compared to 41% from consoles. We also believe that our ART mobile game will help offset some of the broader effects on tariff as we continue to launch new paid content in the future and given the mobile mode hurdles the barriers of owning a console. Since current-gen consoles are past the mid-life cycle of a console generation, we don't view a possible increase in console prices as a major long-term concern and remain cautiously optimistic. Additionally, the gaming industry has historically shown resilience in the face of economic uncertainty.
Speaker Change: That's fair.
Speaker Change: <unk> accounted for approximate 48% of our revenue in 2024.
Speaker Change: 41% from cross sells.
Speaker Change: We also believe that our mobile game will help offset some of the broader effect on Paris.
Speaker Change: We continue to launch new paid content in the future and given them mobile mode.
Speaker Change: Areas of owning a cross sell.
Speaker Change: This current gen consoles are past the lifecycle of a console generation.
Speaker Change: A possible interest in console prices as our major long term concern and remain cautiously optimistic.
Speaker Change: Additionally.
Speaker Change: The gaming industry has historically shown resilience in the face of economic downturn.
Speaker Change: T.
Heidi Chow: While short-term impacts are possible, we remain confident in our ability to adapt to changing economic conditions.
Speaker Change: While short term it has a possible way.
We remain confident in our ability to adapt to changing economic conditions.
Heidi Chow: Looking ahead to the rest of the year, as Peter mentioned, we're gearing up to celebrate the 10-year anniversary of our Survival Evolved franchise. with a series of upcoming releases and announcements in the works to commemorate the game's long-lasting legacy and dedicated player community. We remain focused on expanding the global reach of our games, bringing our content to new audiences around the world. So our mobile game will continue to play a key role in this effort. As mobile broadens the franchise's accessibility and impact across a wider player base, beyond ARC, we are actively investing in scalable growth opportunities across adjacent genres and emerging platforms. Our goal remains to deliver innovative, engaging experiences that resonate with players across diverse platforms and game styles.
Speaker Change: Looking ahead to the rest of the year as Peter mentioned <unk> just.
Speaker Change: Celebrate the 10 year anniversary of arc survival evolve franchise.
Speaker Change: A series of upcoming releases and announcements.
Speaker Change: To commemorate the key.
Speaker Change: Long lasting legacy.
Speaker Change: That's a key player community.
Speaker Change: We remain focused on extending the global reach of our games.
Speaker Change: Content to new audiences around the world.
Speaker Change: So mobile games will continue to play a key role in this effort.
Speaker Change: As mobile province, the franchise's accessibility and impact across a wider player base.
Speaker Change: Alright.
Speaker Change: The investment in scalable growth opportunities across adjacent genre and emerging platforms.
Speaker Change: Our goal remains to deliver innovative engaging experiences that resonate with players across diverse tough ones and Keith style.
Heidi Chow: Thank you all for joining us today.
Speaker Change: Thank you all for joining us today.
Operator: We will now open the line for Q&A. Operator, 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. A confirmation tone will indicate that your line is in the question queue. 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 two. One moment, please, while we poll for questions.
Speaker Change: We will now open the lines for Q&A.
Speaker Change: Operator.
Speaker Change: Thank you we will now be conducting a question and answer session. If he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: One moment, please while we poll for questions.
Speaker Change: Yeah.
Michael Kupinski: Our first question comes from Michael Kupinski with Noble Capital Markets. Please proceed with your question. Thank you. And congratulations on your strong quarter. A couple of questions.
Speaker Change: Our first question comes from Michael Kaplinsky with Noble capital markets. Please proceed with your question.
Michael Kaplinsky: Thank you and congratulations on your strong quarter.
Michael Kaplinsky: A couple of questions I was wondering if you can just talk a little bit about your approach to revenue diversification I know that you had a number of initiatives here, but just kind of what I'd like to hear your strategy for that.
Peter Kang: I was wondering if you can just talk a little bit about your approach to revenue diversification. I know that you had a number of initiatives here. I just kind of wanted like to hear your strategy for that. Thank you.
Peter King: Thank you this is Peter King and.
Peter Kang: This is Peter Kang. And, you know, we'll address your question here. We're actively exploring and investing in new business or games that will improve revenue diversification.
Speaker Change: We will address your question here.
Speaker Change: Actively exploring and investing in new business or games that will improve revenue diversification.
Peter Kang: For example, we have launched a short drama business and signed an MOU with Megamatrix to accelerate our penetration in that area. On gaming, we're always releasing games we acquired from our gaming network. With Robots at Midnight, Honeycomb, A World Beyond, and Echoes of Elysium all releasing this year, we expect the new revenue streams will have a meaningful contribution to our revenue diversification.
Speaker Change: For example, we have launched a short drama business and signed a Mou with Mega matrix to accelerate our penetration in that industry.
Speaker Change: Jamie we're always re leasing gains we acquired from our gaming network. This year.
Speaker Change: With robots at midnight honeycomb world beyond echoes of Elysium, albeit leasing this year.
Speaker Change: The new revenue streams will have a meaningful contribution to our revenue diversification efforts.
Michael Kupinski: And Peter, you mentioned MOU, I was just wondering if you could talk a little bit about the revenue implications of MOU with the mega matrix. Thank you.
Speaker Change: And Peter you mentioned the Mou I was just wondering if you could talk a little bit about the revenue implications of Mou with Mega matrix.
Speaker Change: Thank you.
Tony Guillen: You know, I'll address, I'll let Tony address this one.
Speaker Change: Uh huh.
Speaker Change: I'll, let Tony address this one.
Tony Guillen: Tony. Sure. Hi, Michael. I think at this moment, it's probably a little early to to measure the potential revenue contribution from the short drama business. As we just announced the MOU, but what I can tell is that we have an in-house team, and we have been evaluating, developing that line of business for quite a while. And over the past several weeks, the MPO team and also the in-house team has been working together. At this moment, we are in the early stage to working on a couple of short drama series. There will be some revenue contribution.
Speaker Change: Tony.
Speaker Change: Sure Hi, Michael.
Speaker Change: I think at this moment, it's properly later.
Speaker Change: Early two two <unk>.
Speaker Change: Measure the potential revenue contribution from the short term our business.
Speaker Change: As we just announced the Mou, but what I can tell.
Speaker Change: Is that we have an in house team and we have been evaluating developing that line of business for quite a while and.
Speaker Change: Over the past several weeks.
Speaker Change: P O team and also the in house.
Speaker Change: The team has been working together at this moment and we are.
Speaker Change: In the early stage to working on a couple of Chuck.
Speaker Change: Sarcoma cirrhosis.
Speaker Change: There will be some revenue contribution.
Michael Kupinski: from their line of business. But at this moment, we don't have a specific number. of how many short drama series. But based on the MOU, we. and the two parties has a waiting Co-Developer, at least 10 drama series over the next... Gotcha.
Speaker Change: From then our business, but at this moment.
Speaker Change: We don't have a specific number.
Speaker Change: How many shack promises.
Speaker Change: Developing producing this year.
Speaker Change: Got you.
Speaker Change: And the two parties.
Speaker Change: Waiting too.
Speaker Change: Co developer at least 10 drama cirrhosis over.
Speaker Change: Over the next 12 months.
Speaker Change: Gotcha, and then I was wondering if you could talk about you know obviously you had some cost to increase significantly.
Michael Kupinski: And then I was wondering if you could talk about, you know, obviously you had some cost increase significantly, some of the research and development costs, certainly for some of these products and so forth, but also from advertising and marketing, which was up, you know, about a million or so.
Speaker Change: Research and development costs, certainly for some of these products and so forth, but also from advertising and marketing, which was up about $1 million or so I was just wondering if you could just talk a little bit about advertising and marketing costs and how we should think about those line items as you kind of look to.
Peter Kang: I was just wondering if you could just talk a little bit about advertising and marketing costs and how we should think about those line items as you kind of look to the upcoming quarter. Thank you. Gotcha.
Speaker Change: Coming quarters.
Peter Kang: This is Peter again. Well, we increased the size of our portfolio and as such, you know, marketing expenditures should be In 2025, we attended the GDC Expo, had a booth there and unveiled several games and DLCs in our content pipeline. Those unveiled including Ark Aquatica, Ark Lost Colony, Nyan Sutra Immortal, Nyan Sutra Wushu, just to name a few. Majority of the increase is associated with our GDC participation. We also increased our marketing spend to support game releases in 2025. In addition to the new DLCs for the Ark franchise, we also, you know, announced Robots at Midnight, Honeycomb, The World Beyond, and Echoes of Elysium.
Speaker Change: Yes. This is Peter again, well, we increase the size of our portfolio and as such marketing expenditures should be increasing.
Speaker Change: In 2025, we attended the GDP Expo.
Speaker Change: <unk> had a booth there and unveiled several games in DLC and our content pipeline.
Speaker Change: Those are build to including Archie Quantico arc lost colony <unk> Sutra immortal.
Speaker Change: Sutra Wushu just to name a few.
Speaker Change: Majority of the increase is associated with our GDP participation. We also increased our marketing spend to support game releases in 2025.
Speaker Change: In addition to the new <unk> with our franchise, we also announced robots at midnight honeycomb the world beyond and that goes to believe them.
Peter Kang: We're truly excited about these releases.
Speaker Change: We're truly excited about these releases moving forward, we do not expect to see such quarter over quarter increases as we refine our game mobile strategies.
Peter Kang: Moving forward, we do not expect to see such quarter-over-quarter increases as we refine our game unveil strategy. Explorer, or participation in other games.
Speaker Change: Floor or participation in another game shows.
Michael Kupinski: Gotcha, Peter.
Peter King: Got you Peter and my final question is.
Michael Kupinski: And my final question is, obviously, this is a, you know, you have a lot of expenses, a lot of product launches, and so forth. And I would assume that you're going to monetize that in coming quarters.
Speaker Change: We see this as a.
Speaker Change: You have a lot of expenses a lot of product launches and so forth.
Speaker Change: Assume that youre going to monetize that in coming quarters, but how do we how should investors look at the bottom line and your approach to turning net income positive.
Peter Kang: But how do we how should investors look at the bottom line and your approach to turning net income positive? Great question. Our approach to positive bottom line really centers around cost control and diversified monetization.
Speaker Change: Great question our approach to.
Speaker Change: A positive bottom line really centers around cost control and diversified monetization.
Peter Kang: on the subject of cost control. We we also are certain development function. and reduce our fixed costs and internal headcount burden. Furthermore, R&D and marketing expenses are tightly aligned with focus projects and near-term revenue targets. On to monetization, we have expanded into the short drama business inside of MOU with MegaMatrix to accelerate the short-term drama of business growth. We have premium mods, monetizing our ARC, survival ascended, allowing Snail to scale content with minimal internal investment. We have remade our ARC mobile game, ARC Ultimate Mobile Edition, and that in itself can drive high-margin microtransactions. We continuously seek our investments in profitable and scalable content to add to our content pipeline.
Speaker Change: On the subject of cost control. We also are starting development function.
Speaker Change: And reduce our fixed costs and internal head count burden.
Speaker Change: Furthermore, R&D or marketing expenses are tightly aligned with focused projects and near term revenue target.
Speaker Change: On to monetization, we have expanded into the short drama business inside the Mou with Mega matrix to accelerate the short term drama business growth, we have premier Mas monetize you know arc survival extended allowing snail, do scale content with minimal internal investment we have.
Speaker Change: We made our mobile game arc Ultimate mobile edition.
Speaker Change: And that in itself can drive high margin micro transaction.
Speaker Change: We continuously seek our investments in profitable and scalable content to our content pipeline.
Michael Kupinski: Terrific.
Speaker Change: Terrific.
Michael Kupinski: That's all I have. Congratulations. Keep up the good work. Thank you.
Speaker Change: Paul I have congratulations keep up the good work.
Paul: Thank you.
Operator: At this time, this concludes Snail Inc.'s first quarter 2025 conference call. If your question was not taken, please contact Snail Inc.'s IR team at snal.gateway-grp.com. Thank you for your participation and you may now disconnect.
Speaker Change: At this time this concludes smell inc's first quarter 2025 conference call.
Speaker Change: Your question was not taken please contact <unk> IR team at F N a L.
Speaker Change: Gateway Dash G R P dot com.
Speaker Change: Thank you for your participation and you may now disconnect.
Speaker Change: <unk>.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
[music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change:
Unknown Attendee: Kupinski, Unknown Attendee, Heidy Chow, Peter Kang, Jake Pisano, Patrick McCann, Snail,