Snail (NASDAQ:SNAL) reported second-quarter revenue of $19.7 million, down from $22.2 million a year earlier, as lower sales across its ARK franchise were partly offset by growth from Bellwright and changes in deferred revenue. The company said the quarter reflected timing shifts for major ARK downloadable-content releases that had been expected in June but launched in early July.
Net loss narrowed to $3 million, compared with a $16.6 million loss in the prior-year quarter. Chief Financial Officer Heidy Chow said the improvement primarily reflected the absence of a $14 million income-tax provision recorded a year earlier, as well as improved gross profit, partly offset by higher general and administrative and research and development expenses.
ARK revenue declines and July releases
Chow said second-quarter revenue declined primarily because sales of ARK: Survival Ascended, or ASA, fell by $4.2 million, while sales of ARK: Survival Evolved, or ASE, declined by $1.8 million. ARK Mobile revenue decreased by $400,000. Those declines were partially offset by a $1.5 million increase in Bellwright revenue and a $2.8 million change in deferred revenue.
Bookings, a non-GAAP measure, totaled $21.8 million in the quarter, down from $27.1 million a year earlier. Total units sold were 2 million, compared with 2.1 million in the prior-year quarter. For the first half, unit sales rose to 4.2 million from 3.7 million, driven by higher ASA and Bellwright sales, partly offset by lower ASE sales.
Senior Vice President and Director of Business Development and Operations Peter Kang said ASA sold approximately 1.2 million units in the quarter, with average daily active users of about 120,000 and peak daily active users exceeding 155,000. ASE sold about 574,000 units, with average daily active users of roughly 105,000. ARK Mobile averaged approximately 129,000 daily active users, while total downloads exceeded 13 million.
The company released the ARK Fantastic Tames Season One pack in May. The pack includes three DLC creatures, with Burrowbuck available at launch and Cerberax and Enigmasaur scheduled for the third and fourth quarters, respectively. Snail recognized one-third of sales from the pack in the second quarter and expects to recognize the remaining portion as the additional content is delivered.
In early July, Snail released ARK: Genesis Part 1 Ascended, ARK: Tides of Fortune and ARK: Dragontopia. Chow said the shift of Genesis Part 1 and Tides of Fortune into July moved their revenue contribution from the second quarter into the third quarter. The company expects to recognize approximately $11 million from its deferred-revenue balance in the third quarter related to Genesis Part 1 Ascended, in addition to sales from Tides of Fortune.
Dragontopia content is scheduled to be delivered in phases during the third and fourth quarters, with associated revenue recognized as those updates are provided to DLC owners.
Bellwright console launch supports diversification
Bellwright launched on PlayStation and Xbox during the second quarter after its 2024 early-access release on Steam. Kang said the game has sold more than 1 million lifetime units, generated more than 46.4 million playtime hours and maintained a “very positive” Steam rating for two years.
Following its console launch, Bellwright reached the top-five paid-games list on Xbox, according to Kang, and received strong early user ratings on PlayStation and Xbox. He said combined console daily active users showed positive engagement during the first 30 days following launch.
Kang said Bellwright sales helped support quarterly performance during a relatively measured period for new releases and reinforced the company’s strategy of expanding beyond the ARK intellectual property.
Pipeline includes AAA games, creator tools and PixARK DLC
Snail plans further ARK content releases in the second half, including phased updates for Fantastic Tames and Dragontopia, the planned launch of ARK Maker and the return of ARK: Survival of the Fittest.
The company also announced PixARK: Terracrypt, which Kang described as PixARK’s largest paid DLC expansion. The expansion is planned to include more than 200 hours of gameplay, 80 new creatures and a new environment. Snail displayed a playable demo at ChinaJoy and is targeting a fall launch.
Meanwhile, the company said development continues on three AAA titles: For The Stars, 9 Yin Sutra: Immortal and 9 Yin Sutra: Wushu. Snail released a developer diary for For The Stars in April and plans to show the game at Gamescom. 9 Yin Sutra: Immortal made its public debut at ChinaJoy, alongside a new trailer and an official Steam page.
AI and stablecoin initiatives advance
Through subsidiary Egofold, Snail recently introduced its AI Ranch initiative and a product called the Non-Human Player, or NHP. Kang described NHP as an AI gaming companion intended to observe gameplay through a screen, interpret game activity in real time, and act through standard keyboard and mouse inputs without relying on scripts, APIs or game modification.
Chow also said the company’s USDO stablecoin initiative is progressing toward launch readiness. Snail has developed infrastructure for wallet management, minting and burning, blockchain transfers and know-your-customer verification, she said. The company has submitted money-transmitter-license applications in multiple states and is awaiting responses from regulators. It is also evaluating crypto ATM deployments in California as a potential real-world on-ramp.
During the question-and-answer session, Chow said Snail realized approximately $1.5 million in quarterly savings under a reduced ARK licensing-fee structure that began in April. The company is reinvesting savings into future games and internal development, while the reduced fee also supported gross-profit improvement. Chow added that management expects general and administrative expenses and research and development expenses to remain generally consistent in coming quarters, with no significant quarter-over-quarter changes anticipated.
About Snail (NASDAQ:SNAL)
Snail Inc (NASDAQ: SNAL) is a digital entertainment company focused on the development, publishing and operation of free-to-play online games for PC and mobile platforms. The company’s portfolio spans a variety of genres that include massively multiplayer online role-playing games (MMORPGs), strategy titles, and casual mobile games. Snail manages its games throughout the entire lifecycle, providing design, development, server hosting and community support services to engage players worldwide.
Founded in the early 2000s and headquartered in Xiamen, China, Snail has expanded its footprint with regional offices in North America, Europe and Southeast Asia.
