Earnings call transcript: Snail Inc. misses Q2 2025 forecasts, stock rises post-earnings

Snail Inc. (SNAIL) reported its Q2 2025 earnings, revealing a net revenue of $22.26 million, which marked an increase from the previous year. The company, currently valued at $37 million in market capitalization, posted a net loss of $16.6 million, a significant decline from a net income of $2.3 million in the same quarter last year. Despite missing earnings expectations with an EPS of -$0.01 against a forecast of $0.02, the stock experienced a 7.12% rise in after-hours trading, reaching $1.04 per share. According to InvestingPro data, the company maintains impressive revenue growth of 47% over the last twelve months.

Key Takeaways

• Snail Inc. reported a net loss of $16.6 million for Q2 2025.
• Earnings per share fell short of expectations, with a -150% surprise.
• Stock rose 7.12% in after-hours trading despite missed earnings.
• Revenue increased year-over-year, driven by ARK Survival sales and mobile game downloads.
• New game launches and a stablecoin project are on the horizon.

Company Performance

Snail Inc. demonstrated resilience in Q2 2025 by increasing its net revenue compared to the previous year. The company attributed this growth to strong sales of ARK Survival and an uptick in mobile game downloads. With a healthy gross profit margin of 37.6%, the company shows potential for profitability improvement. However, increased operating expenses and a $12.9 million valuation allowance against deferred tax assets contributed to a net loss, contrasting with the net income recorded in the same period last year. InvestingPro analysis reveals the company operates with moderate debt levels and maintains a debt-to-equity ratio of 1.06.

Financial Highlights

• Revenue: $22.26 million, up from the previous year.
• Bookings: $27.1 million, an 18.5% year-over-year increase.
• Net Loss: $16.6 million, compared to a net income of $2.3 million last year.
• EPS: -$0.01, missing the forecast of $0.02.

Earnings vs. Forecast

Snail Inc.’s earnings per share were -$0.01, falling short of the forecasted $0.02, resulting in a -150% surprise. This miss reflects increased operating expenses and a valuation allowance that impacted profitability. Historically, this represents a notable deviation from previous quarters where the company met or exceeded expectations.

Market Reaction

Despite the earnings miss, Snail Inc.’s stock rose 7.12% in after-hours trading, reaching $1.04 per share. This positive movement suggests investor optimism, potentially fueled by the company’s revenue growth and strategic initiatives. The stock remains within its 52-week range, with a high of $3.42 and a low of $0.64. InvestingPro identifies several key factors for investors to consider, including the company’s attractive PEG ratio of 0.19 and relatively low market volatility with a beta of 0.46. Get access to 8 additional exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription.

Outlook & Guidance

Looking forward, Snail Inc. plans to continue expanding its gaming portfolio with new releases such as "Honeycomb" and "Echoes of Elysium." Additionally, the company is venturing into the stablecoin market with SNAL Coins LLC, aiming to leverage regulatory frameworks for digital payments infrastructure. Future EPS forecasts for FY2025 Q3 and Q4 are -$0.00 and $0.06, respectively, indicating cautious optimism.

Executive Commentary

Co-CEO Tony Tan described Q2 as "a transformative quarter for SNAIL," highlighting the synergies between gaming and stablecoin initiatives. Tan emphasized the potential for substantial long-term ROI from these ventures, expressing optimism about the company’s future prospects.

Risks and Challenges

• Increased operating expenses could continue to pressure margins.
• The valuation allowance against deferred tax assets poses a financial challenge.
• Regulatory hurdles in the stablecoin market may impact future projects.
• Market competition in the gaming sector remains intense.
• Economic uncertainties could affect consumer spending on entertainment.

Overall, while Snail Inc. faced challenges in Q2 2025, including a concerning current ratio of 0.84 indicating potential liquidity constraints, its strategic initiatives and market position in the gaming and stablecoin sectors offer potential growth opportunities. Discover the complete financial health analysis and detailed Fair Value assessment in the comprehensive Pro Research Report, available exclusively on InvestingPro.

Full transcript - Snail Inc (SNAL) Q2 2025:

Conference Operator, Snail Inc.: Thank you for standing by, and welcome to Snail Inc. Second Quarter twenty twenty five Earnings Conference Call and Webcast. I would now like to turn the call over to Stephen Shinmachi with Investor Relations.

Stephen Shinmachi, Investor Relations, Snail Inc.: Thank you, and good afternoon, everyone. Welcome to Snail Inc. Second quarter twenty twenty five earnings conference call and webcast. Joining us for today’s call are Snail Inc. Co CEO, Tony Tan Senior Vice President, Director of Business Development and Operations, Peter King and Chief Financial Officer, Heidi Chao.

The company’s second quarter twenty twenty five earnings press release was filed earlier today and is available on the Investor Relations section of Snail Inc. Website at www.snail.com or the SEC’s website at www.sec.gov/ekker. During this call, management may make forward looking statements regarding future events and the future financial performance of the company. 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 the SEC, the most recent Form 10 ks that was filed with the SEC on 03/26/2025 and other SEC filings.

The company makes 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. You

Heidi Chao, Chief Financial Officer, Snail Inc.: will

Stephen Shinmachi, Investor Relations, Snail Inc.: find a 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 Tony Tien, Co Chief Executive Officer of SNAIL. Sir, please proceed.

Tony Tan, Co-CEO, Snail Inc.: Thank you and good afternoon everyone. Thank you for joining us today to review our financial and operating results for the second quarter ended 06/30/2025. The second quarter was a transformative quarter for SNAIL, highlighted by the official announcement of our proprietary Stablecoin project. We believe this project positions SNAIL as one of the pioneers within the gaming industry to embrace and adopt such initiatives. Heidi will provide a detailed overview of the strategic rationale behind our entry into stablecoins later in the call.

But at a high level, the decision reflects strong alignment with our business model and external opportunities. As a gaming company, we see clear synergies and compelling use cases that make this move not just innovative, but also one with substantial long term ROI potential. SNAL’s vision remains rooted in delivering innovative products and contents to the evolving gaming landscape. Our pursuit of launching our proprietary stablecoin reflects that vision and offers a path to generate meaningful value for our business and shareholders. We have been intentional in selecting and retaining the right partners to establish a strong foundation for success and have initiated our capital formation strategy through the recent ATM offering filed with the SEC.

Marking the first step in our broader capital raising efforts tied directly to this stablecoin project. We remain committed to transparency and we’ll continue to share regular updates as the project progresses. We are confident in the transformative impact this stablecoin initiative will have once fully launched. Turning to our second quarter results, we saw a modest year over year increase in revenues, but more notably saw meaningful growth in both bookings and units sold. Bookings rose by 18.5% to 27,100,000.0 and units sold increased by 58.4% to 2,100,000 for the quarter.

This growth was largely driven by strong performance in June, supported by our annual publisher sale and the successful launch of new content celebrating the ten year anniversary of ARC. The publisher sale events feature the steep discounts across several of our most popular titles, driving a surge of new players across ARC and other games in our portfolio. A key highlight was ASE, which was discounted for the first time since 2023, resulting in significant uplift in its user base during the promotional period. Additionally, the ARC ten year anniversary celebration brought substantial new content updates to ASA for the fueling engagement and growth. We also launched the presale for ARC last Colony in June, which contributed significantly to our bookings.

Pre sale performance slightly exceeded our internal projections and was the primary driver of the growth in bookings during Q2. Beyond the art franchise, we continued expanding our indie publishing portfolio under the Wandering Wizards label. In the quarter, we released several new indie titles and strategically acquired publishing rights to additional promising projects. Peter will share more detailed insights into our gaming portfolio and roadmap here shortly. A quick note on our subsidiary, Interactive Films, and other short films business.

We are continuing to progress on our MOU we announced few months ago on a joint development production and a global distribution of at least 10 short dramas. Both sides are collaboratively working across the development phase and look forward to releasing these short film dramas together over the next couple of months. We also announced just last week that interactive films will be developing and publishing a new dating simulation title called the fame game Welcome to Hollywood. This marks a first for snail within this genre, and the project benefits from the streamlined mechanics that allow for cost effective development and rapid iteration while also preserving the game’s emotional depth. Direct entry for the game is low.

Making the game accessible to casual players and for those who have an interest in a narrative focused game, We expect a quick turnaround from development to launch, and we look forward to officially releasing this game later this year. Looking ahead to the future strategy of SNAIL, we will aim to execute a deal strategy where we not only continue to drive growth in our core gaming business, but also steadily advance our stablecoin roadmap. Our gaming operations remain the cornerstone of our near term focus and the foundation of our company. At the same time, the Stablecoin initiative represents a long term strategic opportunity with clear synergies across our portfolio. While external use cases of the stablecoins still remain fluid over time, We see the potential of these two pillars to become increasingly interconnected, enabling us to deliver new user experiences, innovative solutions, and unlock long term value.

Something nine, if any, our competitors have been able to activate. Our team remains highly optimistic about Snail’s future across both gaming and the Sablecoin initiatives. We are committed to executing on our vision and delivering sustained meaningful results for our shareholders. I will now hand it over to Peter to dive deeper into our gaming operations. Peter?

Peter King, Senior Vice President, Director of Business Development and Operations, Snail Inc.: Thanks, Tony, and good afternoon, everyone. The second quarter proved to be a strong engagement driver across many of our titles, building on the momentum we highlighted in our previous earning call. During this past quarter, average DAU for ARC Survival Evolved and ARC Survival Ascended reached approximately 157,085, respectively. As of quarter end, ARC has been played for four point one billion cumulative hours, with the average screen time for users reaching one hundred and sixty one hours. Our mobile game also continues to grow as a result of delivering consistent new content with the mobile title surpassing 6,900,000 downloads across iOS and Android, an average DAU of approximately 104,000 during the quarter.

These encouraging engagement results are a direct reflection of our deliberate efforts through Q2, including the rollout of new content updates, strategic releases, and our publisher sale event that kept our communities consistently engaged and drove in new players. Starting in April, we kicked off the quarter with the seasonal excellent adventure event for Survival Ascended and launched the Extinction Map on ARC mobile. April also marked the one year early access anniversary of BellRite, where we introduced substantial new content and player requested features to support the franchise’s long term growth. On the indie front, we launched two new titles, The Journey Begins and Chasmophere in April, and three more new titles to close out the quarter, Castle of Secrets, Robots at Midnight, and The Last Airship. Building on this momentum, May was highlighted by Ark Survival Ascended participation in the PlayStation Plus subscription program PS Plus.

During the month, Survival Ascended was downloaded over 8,000,000 times via PlayStation Plus, signaling strong and growing engagement from our console player base. June emerged as the most impactful month of the quarter, marked by the ten year anniversary of the Arc franchise in our annual Steam Publisher Sale event. The ten year anniversary of Arc marked an important moment for both our team and our global community of players. As discussed last quarter, ARC’s continued ability to attract a global audience across multiple platforms speaks to the franchise’s enduring relevance and our commitment to serving the loyal player base that has supported us over the past decade. We’re proud of the enduring position ARK holds in today’s sandbox survival market and remain focused on delivering consistent content updates and new DLCs that drive engagement and support long term growth.

To celebrate the anniversary, we rolled out several key updates across ARC, including the first major update to Astro’s DLC on Survival Ascended, the launch of Arc Ragnarok on Survival Ascended, and the release of Genesis Part one on Arc Mobile. These activations led to a sharp rise in player engagement. Arc Survival Ascended achieved its highest peak concurrent users and daily active users on Steam in 2025, while Arc Mobile saw a 27.4% increase in first time downloads and a 17.8% increase in daily active users during the launch week of Genesis Part one compared to the previous week. Complementing the anniversary momentum, we also held our annual Steam Publisher Sale event in June, which served as a critical driver for both player acquisition and engagement across our portfolio. Starting with Arc, Arc Survival Ascended, Arc Survival Evolved, Pixarc, and Arc Park were all discounted during this event.

This was also the first time since 2023 that Arc Survival Evolved was on discount. Arc Survival Evolved saw a strong resurgence in both sales and engagement. Total units sold increased by 3.8 times and average daily sales rose over 3000% compared to prior months in 2025. Peak concurrent players reached approximately 66,000, demonstrating the franchise’s continued global resonance even a decade after launch. Other games in our portfolio also saw significant uplift with deep discounts and new content updates supporting titles like Bellwright, West Hunt, The Cecil, Chasmophere, and Survival Mercs.

These promotions reinforce our ongoing strategy to increase the visibility, traction, and engagement of our smaller scale indie games. Our publisher sale event remains a cornerstone of our annual engagement and monetization strategy. This year’s event drove daily unit sales 10.8 times the average non promotional periods in 2025. With the steepest discounts to date on key titles and expanded portfolio featuring recent launches and updates, these sale events are powerful discovery engines, bringing in new players, reinvigorating our back catalog, and helping build long term engagement and monetization across both established and emerging titles. In regards to Aquatica, our team is working diligently to address the issues that came with the launch.

We’ve made a pre Aquatica branch available on Steam so players can roll back to the version of Survival Evolved prior to the DLC launch. We’ll continue sharing updates on the Steam forums as we work towards a full resolution. Looking ahead to the content roadmap for the remainder of the year, we have a strong slate of updates and releases designed to sustain player engagement and expand our portfolio. For the Arc franchise, we will continue rolling out seasonal events, community driven mods, and regular content updates to ensure a steady stream of fresh experiences for our players. A major focus will be on the preparation and launch of Lost Colony, the first map built exclusively for Survival Ascended and a storyline that bridges ARK Extinction, ARK Genesis, and ARK two.

Following the preorder sale launch in June, we’ve seen encouraging early results. Sales tracked slightly ahead of our internal projections during the first month, contributing meaningfully to our Q2 bookings growth. During the publisher sale event, the Lost Colony expansion pass was number one preorder on PlayStation as well. Beyond Ark, we are also preparing to launch several new titles across different genres and platforms, including Honeycomb, Echoes of Elysium, Replenjin, and the fame game, Welcome to Hollywood, a new relationship sim game to be developed in house under interactive films. Together, these initiatives underscore our commitment to delivering high quality content, nurturing our core franchises and building the next generation of titles that will shape Snail’s long term success.

With that, I will now turn the call over to Heidi to discuss our financial results and the direction of our stablecoin initiative. Heidi?

Heidi Chao, Chief Financial Officer, Snail Inc.: Thank you, Peter, and hello, everyone. Thank you for joining us today. I’m pleased to share the details of our financial results for the second quarter ended 06/30/2025. Net revenue for the second quarter increased to $22,260,000 in the same period last year. The increase was primarily due to an increase in total AHRQ sales of $3,300,000 $3,000,000 recognized for the inclusion of ART Survival Ascendant in the platform subscription program in 2025.

An increase in sales of the ART Mobile of 600,000 that was driven by the release of ART Automate Mobile Edition. And an increase in revenues related to other games of $400,000 due to the release of various games. These increases were partially offset by the increase in deferred revenue of $3,700,000 and a decrease in revenue related to bail write of $3,000,000 in the three months ended 06/30/2025, compared to the same period last year. Net revenues for the six months ended 06/30/2025, increased by 18.4% to 42,300,000 compared to $35,700,000 in the same period last year. The increase was primarily due to an increase in total AHRQ sales of $6,100,000.03000000 dollars in revenues for the inclusion of AHRQ Survival Ascended in a platform subscription program, and an increase in sales of the AHRQ mobile of $1,900,000 that was driven by the release of AHRQ Automobile Edition.

These increases were partially offset by the decrease in revenue specific to BellRite of $2,200,000 a non recurring Angela gain settlement of $1,200,000 occurring in 2024. The related decrease in Angela Gains revenue of $700,000 and the increase in deferred revenue of $300,000 during the six months ended 06/30/2025, compared to the same period last year. Net loss for the three months ended 06/30/2025 was negative $16,600,000 compared to net income of $2,300,000 in the same period last year, primarily due to increases in the cost of revenue and operating expenses, a result of the company’s increased headcount, research and development, and marketing expenses, and the recognition of a valuation allowance against the company’s deferred tax assets of 12,900,000.0 during the quarter ended 06/30/2025. Net loss for the six months ended 06/30/2025 was negative $18,500,000 compared to 500,000 in the same period last year, primarily due to increases in the cost of revenue and operating expenses, a result of the company’s increased headcount, research and development, and marketing expenses, and an increase in income tax provision of $12,300,000 a result of the valuation allowance recognized against the company’s deferred tax assets during the six months ended 06/30/2025. Bookings for the second quarter increased 18.5% to $27,100,000 compared to 22,900,000.0 from the same period last year.

The increase was primarily driven by various sale promotions in 2025 that did not occur in 2024, specifically around ART Survival Evolved and the release of ART Lost Colony to presell in 2025. Bookings for the six months ended 06/30/2025 increased 16.3% to $49,400,000 compared to $42,400,000 in the same period last year. The increase was primarily driven by the release of ART Survival Ascended DLC trials in the 2025, sales promotion that was the first of their kind of ART Survival Evolved in 2025, and the release of ART Lost Colony to presale in 2025. EBITDA for the second quarter was negative 2,400,000 compared to $3,100,000 in the same period last year. The decrease was primarily due to an increase in net loss of $18,900,000 partially offset by an increase in the provision of income taxes of $13,300,000 and a decrease in interest income and interest income related parties of 100,000 EBITDA for the six months ended 06/30/2025 was negative $5,800,000 compared to $1,200,000 in the same period last year.

The decrease was primarily due to an increase in net loss of $19,000,000 a decrease in interest expenses of $300,000 partially offset by an increase in the provision for income taxes of $12,300,000 As of 06/30/2025, unrestricted cash and cash equivalents were $7,900,000 To review our detailed financial statements, please refer to the earnings press release and also the Form 10 Q filed with the SEC. Now, onto our stablecoin project. The adoption of the crypto treasury strategy was accelerated significantly, especially over the past year. On brand with the ethos of our organization, innovation has been at the heart of our approach. And the growing market validation of these treasury models prompt us to begin a thorough exploration of how we can potentially adopt and incorporate a similar framework.

After several months of internal analysis and discussion, we identified a unique opportunity to chart our own path, one that centers on the development and issuance of a proprietary U. S. Dollar backed stablecoin. Rather than simply following prevailing models, we saw the potential to design a solution tailored specifically to our business ecosystem. We believe this initiative represents a natural evolution of our innovation led strategy, offering the potential to address current market gaps in the digital payments and on chain financial infrastructure by delivering a secure, regulated, and scalable solution.

Our decision to pursue the Stablecoin project was both deliberate and timely, aligning closely with the strong regulatory momentum generated by the passage of the Genius Act. This legislation established a regulatory framework for U. S. Dollar backed stablecoins, offering clarity and consistency in how such assets are governed. We believe this ad is a tailwind across the digital asset space and reinforce the strategic relevance of our stablecoin initiative.

To that end, we have taken several foundational steps to accelerate the launch of this project. A top priority has been identifying and engaging the right strategic partners and advisors to ensure long term success. We’re pleased to have retained Doctor. George Chow, founder and CEO of Ascendis, a full stack cryptocurrency financial platform as an external consultant. Doctor.

Chow brings deep industry expertise and will play a crucial role in helping us design and implement the core infrastructure of our stablecoin. In parallel, we have engaged an experienced legal advisor, including a nationally recognized law firm ran by Chambers Central Legal USA as a leader advisor to cryptocurrency and blockchain clients. Their support will be essential in building a robust and fully compliant legal and regulatory framework. Additionally, we have formed SNAL Coins LLC, a wholly owned subsidiary of SNAL, which will serve as the dedicated entity responsible for the issuance, management, and operational oversight of our stablecoin. This structure also provides flexibility to explore broader opportunities in digital asset management as the ecosystem evolves.

And more recently, we have initiated our capital formation strategy through our equity market offering to begin building the necessary reserve backing need for our stablecoin. Looking ahead, we intend to stay transparent and maintain an open dialogue with our shareholders to ensure the public remains up to date on any material developments and key milestones achieved as the project progresses. At this stage, the project remains fluid with ongoing internal discussions around the regulatory framework, infrastructure, and additional potential use cases that could enhance the coin’s value and utility. In parallel, we are actively engaging with potential partners, consultants, and advisors to support key aspects of the project. At the same time, we are assessing future hiring needs for experts in blockchain, stablecoin, and digital asset strategy to determine which capabilities should be built in house and which will benefit from external expertise.

As Tony mentioned at the onset of the call, SNELD is now pursuing a dual pronged growth strategy. This involves both the continued execution of our core gaming business, including the ongoing growth of the ARCH franchise and the expansion of our indie game portfolio and the phase. Long term approach to our stablecoin initiative. Our team remains excited about the future of SNAIL, and we look forward to the continued execution on all fronts to maximize shareholder value. Thank you all for joining us today.

Operator?

Conference Operator, Snail Inc.: At this time, this concludes Snail Inc. Second quarter twenty twenty five conference call. If your question was not taken, please contact Snail Inc. IR team at

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