CULVER CITY, Calif., April 01, 2024 (GLOBE NEWSWIRE) -- Snail, Inc. (NASDAQ: SNAL) ("Snail" or "the Company"), a leading, global independent developer and publisher of interactive digital entertainment, today announced financial results for its fourth quarter and full year ended December 31, 2023.

Jim Tsai, Chief Executive Officer commented, "This past year has been filled with exciting milestones for Snail. We launched ARK: Survival Ascended, which sold more than 600,000 units within the first two weeks and surpassed 1.5 million units in sales to date. We are pleased to see the continued engagement in the ARK series and plan to build on this momentum in 2024."

Fourth Quarter & Full Year 2023 Highlights

• ARK: Survival Ascended. On October 25, 2023, the Company launched its flagship remake of the ARK franchise leveraging Unreal Engine 5's stunning graphics and introduced a game-altering cross-platform modding system, ushering in a new era of creativity.
  • ARK: Survival Ascended was ranked the top #1 selling game on Steam on launch day.
  • Since its launch, ARK: Survival Ascended sold 1.6 million units and has an average of 182,000 daily active users ("DAUs") with a peak of 308,000 DAUs.
    
• ARK: Survival Evolved. In the three months and year ended December 31, 2023, ARK: Survival Evolved averaged a total of 192,000 DAUs and 235,000 DAUs, respectively.
  
  • ARK: Survival Evolved units sold increased for the fourth quarter 2023 compared to the same period in 2022; approximately 0.7 million vs. 1.6 million, respectively.
  • Units sold decreased for the year ended December 31, 2023 compared to the same period in 2022; approximately 4.4 million vs. 5.5 million, respectively.
    

Net revenues for the three months ended December 31, 2023 was $28.6 million as compared to $15.3 million in the three months ended December 31, 2022. The increase in net revenues was primarily due to the release of ARK: Survival Ascended.

Net revenues for the year ended December 31, 2023 decreased by $13.5 million to $60.9 million, or 18.2%, compared to $74.4 million in the prior year period. The decrease in net revenues was due to a decrease in Ark Mobile sales of $2.9 million, a decrease in one-time deferred revenue from contracts recognized in 2022 of $10.3 million, one-time payments in 2022 of $8.5 million related to free download promotions and DLC's, that did not occur in 2023 and an increase in deferred revenues of $25.2 million related to Ark; partially offset by an increase in Ark sales of $32.7 million.

Net income for the three months ended December 31, 2023 was $2.4 million compared to a net loss of $2.3 million for the three months ended December 31, 2022. The increase in net income is due to the release of ARK: Survival Ascended, reduced general and administrative expenses of $2.5 million and decreased professional expenses related to compliance with public company requirements and litigation related expenses, partially offset by increased advertising and marketing costs of $0.9 million related to the ARK: Survival Ascended release and a $3.9 million decrease in the income tax benefit for the period.

Net loss was $9.1 million for the year ended December 31, 2023 as compared to a net income of $1.0 million for the year ended December 31, 2022, representing a decrease of $10.1 million. The decrease was primarily due to decreased revenues of $13.5 million, increased research and development costs of $2.2 million, increased advertising and marketing costs of $0.9 million, increased interest expenses of $0.6 million, decreased interest income – related party of $0.6 million, partially offset by a decrease in cost of revenues of $4.8 million, and a decrease in general and administrative expenses of $2.9 million.

Bookings for the three months ended December 31, 2023 was $52.6 million as compared to $11.9 million for the three months ended December 31, 2022. The increase was due to the strong release of ARK: Survival Ascended on the Steam, PlayStation and Xbox platforms.

Bookings for the year ended December 31, 2023 was $85.7 million as compared to $63.7 million in the year ended December 31, 2022. The increase was due to the release of ARK: Survival Ascended in the fourth quarter of 2023. In addition to increased sales of ARK: Survival Ascended, the Company deferred approximately $22.0 million in revenues during the fourth quarter of 2023 for the ARK: Survival Ascended DLC's which have not yet released and had $10.3 million in one-time deferred contract revenues recognized in 2022 that did not occur in 2023.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the three months ended December 31, 2023 increased by $8.8 million, or 169%, as compared to the three months ended December 31, 2022. The increase was primarily the result of an increase in net income of $4.7million, partially offset by an increase in provision for income taxes of $3.9 million.

EBITDA for the year ended December 31, 2023 decreased by $9.0 million, or 1,198.1%, compared to the year ended December 31, 2022, primarily as a result of a decrease in net income of $10.1 million, partially offset by a decrease in interest income of $0.7 million and an increase in interest expense of $0.6 million.

As of December 31, 2023, unrestricted cash was $15.2 million versus $12.9 million as of December 31, 2022.

Use of Non-GAAP Financial Measures

In addition to the financial results determined in accordance with U.S. generally accepted accounting principles, or GAAP, Snail believes Bookings and EBITDA, as non-GAAP measures, are useful in evaluating its operating performance. Bookings and EBITDA are non-GAAP financial measures that are presented as supplemental disclosures and should not be construed as alternatives to net income (loss) or revenue as indicators of operating performance, nor as alternatives to cash flow provided by operating activities as measures of liquidity, both as determined in accordance with GAAP. Snail supplementally presents Bookings and EBITDA because they are key operating measures used by management to assess financial performance. Bookings adjusts for the impact of deferrals and, Snail believes, provides a useful indicator of sales in a given period. EBITDA adjusts for items that Snail believes do not reflect the ongoing operating performance of its business, such as certain non-cash items, unusual or infrequent items or items that change from period to period without any material relevance to its operating performance. Management believes Bookings and EBITDA are useful to investors and analysts in highlighting trends in Snail's operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which Snail operates and capital investments.

Bookings is defined as the net amount of products and services sold digitally or physically in the period. Bookings is equal to revenues excluding the impact from deferrals. Below is a reconciliation of total net revenue to Bookings, the closest GAAP financial measure.

We define EBITDA as net income (loss) before (i) interest expense, (ii) interest income, (iii) income tax provision (benefit from) and (iv) depreciation and amortization expense. The following table provides a reconciliation from net income (loss) to EBITDA:

Webcast Details

The Company will host a webcast at 4:30 PM ET today to discuss the fourth quarter and full year 2023 financial results. Participants may access the live webcast and replay on the Company's investor relations website at https://investor.snail.com/.

Forward-Looking Statements

This press release contains statements that constitute forward-looking statements. Many of the forward-looking statements contained in this press release can be identified by the use of forward-looking words such as "anticipate," "believe," "could," "expect," "should," "plan," "intend," "may," "predict," "continue," "estimate" and "potential," or the negative of these terms or other similar expressions. Forward-looking statements appear in a number of places in this press release and include, but are not limited to, statements regarding Snail's intent, belief or current expectations. These forward-looking statements include information about possible or assumed future results of Snail's business, financial condition, results of operations, liquidity, plans and objectives. The statements Snail makes regarding the following matters are forward-looking by their nature: growth prospects and strategies; launching new games and additional functionality to games that are commercially successful; expectations regarding significant drivers of future growth; its ability to retain and increase its player base and develop new video games and enhance existing games; competition from companies in a number of industries, including other casual game developers and publishers and both large and small, public and private Internet companies; its ability to attract and retain a qualified management team and other team members while controlling its labor costs; its relationships with third-party platforms such as Xbox Live and Game Pass, PlayStation Network, Steam, Epic Games Store, My Nintendo Store, the Apple App Store, the Google Play Store and the Amazon Appstore; the size of addressable markets, market share and market trends; its ability to successfully enter new markets and manage international expansion; protecting and developing its brand and intellectual property portfolio; costs associated with defending intellectual property infringement and other claims; future business development, results of operations and financial condition; the ongoing conflicts involving Russia and Ukraine, and Israel and Hamas, on its business and the global economy generally; rulings by courts or other governmental authorities; the Share Repurchase Program, including expectations regarding the timing and manner of repurchases made under the program; its plans to pursue and successfully integrate strategic acquisitions; assumptions underlying any of the foregoing.

Further information on risks, uncertainties and other factors that could affect Snail's financial results are included in its filings with the Securities and Exchange Commission (the "SEC") from time to time, annual reports on Forms 10-K and quarterly reports on 10-Q filed, or to be filed, with the SEC. You should not rely on these forward-looking statements, as actual outcomes and results may differ materially from those expressed or implied in the forward-looking statements as a result of such risks and uncertainties. All forward-looking statements in this press release are based on management's beliefs and assumptions and on information currently available to Snail, and Snail does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

About Snail, Inc.

Snail is a leading, global independent developer and publisher of interactive digital entertainment for consumers around the world, with a premier portfolio of premium games designed for use on a variety of platforms, including consoles, PCs and mobile devices.

For additional information, please contact: investors@snail.com