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    SNAL
    Earnings call· Jun 2026(Q2 FY26)

    Snail Q2 FY26 earnings call SNAL

    Aug 11, 2026 Source

    Executive summary

    Snail, Inc. Q2 FY26 — Diversified Content Pipeline and AI Initiative

    Snail, Inc. reported a mixed Q2 FY26 with revenue and bookings declines driven by maturing ARK titles, though Bellwright's console launch provided a notable offset. The company significantly improved its net loss and cash position, benefiting from reduced licensing fees and deferred revenue recognition. Management is actively diversifying its portfolio with a robust gaming content pipeline and a new AI companion initiative, NHP, alongside continued progress on its stablecoin project, USDO.

    Highlights

    5

    • Bellwright console launch successful, reaching top five paid games on Xbox and contributing $1.5 million to Q2 revenue and $3.6 million to six-month revenue.

    • Net loss improved significantly to $3 million in Q2 FY26 from $16.6 million in Q2 FY25, and to $0.9 million for the six-month period from $18.5 million.

    • Unrestricted cash increased to $13.3 million as of June 30, 2026, from $8.6 million at December 31, 2025.

    • Introduction of the AI Ranch initiative and Non-Human Player (NHP) AI companion technology, aiming for personalized gaming experiences.

    • Gross profit improved in Q2 despite revenue decrease, partly due to $1.5 million quarterly savings from reduced ARC licensee fees.

    Concerns

    4

    • Net revenue for Q2 FY26 decreased to $19.7 million from $22.2 million YoY, primarily due to decreases in ASA ($4.2M), ASE ($1.8M), ArcMobile ($0.4M), and SaughtyTV ($0.2M).

    • Bookings for Q2 FY26 decreased to $21.8 million from $27.1 million YoY, mainly due to lower sales of ASE and ASA.

    • EBITDA for Q2 FY26 was a loss of $3 million, compared to a loss of $2.4 million in the same period last year, a slight decrease.

    • Total units sold for Q2 FY26 decreased to 2 million from 2.1 million YoY, driven by a 200,000 unit decrease in ARK franchise IP sales.

    Guidance & targets

    5
    CategoryTargetConfidence
    Deferred Revenue Recognition
    $11 million
    medium materiality
    High
    Fantastic Tames Pack Revenue Recognition
    Remaining two-thirds
    medium materiality
    High
    Dragontopia Revenue Recognition
    Recognized in phases
    medium materiality
    High
    R&D Expenses
    Consistent
    medium materiality
    High
    G&A Expenses
    Consistent
    medium materiality
    High

    Operational metrics

    25
    Net Revenue
    $19.7 milliondown from $22.2 million YoY
    Q2 FY26

    Decrease primarily due to lower sales of ARK franchise titles, partially offset by Bellwright and deferred revenue.

    Net Revenue
    $47 millionup 11% from $42.3 million YoY
    6 months ended Q2 FY26

    Increase primarily due to Bellwright sales and deferred revenue changes, partially offset by decreases in ASE and ASA.

    Net Loss
    $3 millionimproved from $16.6 million YoY
    Q2 FY26

    Improvement due to absence of prior year's income tax provision and gross profit improvement, partially offset by higher G&A and R&D.

    Net Loss
    $0.9 millionimproved from $18.5 million YoY
    6 months ended Q2 FY26

    Improvement due to absence of prior year's income tax provision and gross profit improvement.

    Adjusted EBITDA
    loss of $3 millioncompared to loss of $2.4 million YoY
    Q2 FY26

    Slight decrease due to increase in net income and decrease in depreciation, offset by increase in income tax provision.

    Adjusted EBITDA
    loss of $0.6 millionup 88.8% from loss of $5.8 million YoY
    6 months ended Q2 FY26

    Increase primarily due to decrease in net loss, offset by decrease in income tax provision.

    Bookings
    $21.8 milliondown from $27.1 million YoY
    Q2 FY26

    Decrease primarily due to lower sales of ASE and ASA, partially offset by Bellwright.

    Bookings
    $48.7 milliondown slightly from $49.4 million YoY
    6 months ended Q2 FY26

    Slight decrease due to lower sales of ASE, offset by increased sales of ASA and Bellwright.

    Unrestricted Cash
    $13.3 millioncompared to $8.6 million as of December 31, 2025
    as of June 30, 2026

    Cash balance at quarter end.

    Deferred Revenue Balance
    $28.5 millionincreased
    as of June 30, 2026

    Increased balance, with $11 million expected to be recognized in Q3.

    ARC Licensee Fee Savings
    $1.5 millionstarting Q2 FY26
    quarterly

    Savings realized from April 2026, reinvested into future game development and improved gross profit.

    Gross Profit Improvement
    $6.5 millionYoY
    6 months ended Q2 FY26

    Contributed to net loss improvement.

    AHRQ Units Sold
    574,000
    Q2 FY26

    Consistent activity and engagement.

    AHRQ Average DAU
    105,000
    Q2 FY26

    Consistent activity and engagement.

    AHRQ Peak DAU
    131,000
    Q2 FY26

    Consistent activity and engagement.

    ASA Units Sold
    1.2 million
    Q2 FY26

    Strong sales.

    ASA Average DAU
    120,000
    Q2 FY26

    Strong engagement.

    ASA Peak DAU
    155,000+
    Q2 FY26

    Strong engagement.

    ArcMobile Average DAU
    129,000
    Q2 FY26

    Strong engagement.

    ArcMobile Total Downloads
    13 million+
    lifetime

    Exceeded 13 million.

    Bellwright Lifetime Units Sold
    1 million+
    lifetime

    Achieved since Early Access STEAM launch.

    Bellwright Lifetime Playtime Hours
    46.4 million+
    lifetime

    Achieved since Early Access STEAM launch.

    Bellwright Console Launch Performance
    top five paid games
    Q2 FY26

    Earned strong early user ratings on both PlayStation and Xbox.

    PixArc TerraCrypt DLC Gameplay Hours
    200+
    per player

    Planned to introduce more than 200 hours of gameplay.

    PixArc TerraCrypt DLC New Creatures
    80
    N/A

    Planned to introduce 80 new creatures.

    Product announcements

    11
    ProductTypeDetails
    ARK Fantastic Tames Season 1 Packlaunch
    Genesis Part 1 DLC (for ASA)launch
    ARK Tides of Fortunelaunch
    ARK Dragontopialaunch
    Bellwright console launchlaunch
    AI Ranch initiative / Non-Human Player (NHP)launch
    ARK Makerlaunch
    ARK: Survival of the Fittestlaunch
    PixArc TerraCrypt DLClaunch
    For the Starsmilestone
    Nayan Sutra Immortalmilestone

    Risks & headwinds

    6
    Revenue decline in core ARK titlesQ2 FY26

    Q2 net revenue decreased by $2.5 million YoY, with ASA down $4.2 million, ASE down $1.8 million, ArcMobile down $0.4 million, and SaughtyTV down $0.2 million.

    Mitigation: Diversifying content roadmap beyond ARK IP, successful Bellwright console launch, robust gaming content pipeline, new AI initiative.

    Bookings declineQ2 FY26

    Q2 bookings decreased to $21.8 million from $27.1 million YoY.

    Mitigation: Offset by bookings generated from Bellwright; focus on new content releases in Q3 and Q4.

    EBITDA decreaseQ2 FY26

    Q2 EBITDA was a loss of $3 million, compared to a loss of $2.4 million in the same period last year.

    Mitigation: Offset by increase in net income and decrease in depreciation, though impacted by increase in income tax provision.

    Timing shift of DLC launchesQ2 FY26 / Q3 FY26

    Genesis Part 1 Ascended and Tides of Fortune launched in early July instead of June, shifting related revenue contribution into Q3.

    Mitigation: Expected recognition of $11 million from deferred revenue in Q3 2026.

    Phased revenue recognition for DLCsQ2, Q3, Q4 FY26

    Only one-third of Fantastic Tames Pack revenue recognized in Q2; remaining two-thirds in Q3/Q4. Dragontopia revenue also recognized in phases during Q3/Q4.

    Mitigation: Revenue will be recognized as additional content is delivered, contributing to future quarters.

    Regulatory hurdles for stablecoinOngoing

    Money transmitter license applications submitted across multiple states are awaiting review and approval.

    Mitigation: Engaging proactively with regulators and awaiting feedback on applications.

    What to watch in Q3 FY26

    5

    Deferred Revenue Recognition (Genesis Part 1 Ascended DLC)

    Q3 2026
    Current$0 (not recognized in Q2)
    Target$11 million recognized

    Why it matters

    This is a significant portion of deferred revenue expected to convert to recognized revenue, impacting Q3 financial performance.

    As a reminder, we expect to recognize approximately $11 million from our deferred revenue balance in connection with the launch of Genesis Part 1 Ascended DLC. in addition to sales from Tyson Fortune in the third quarter of 2026.

    Q&A highlights

    4

    How much of the $1.5 million quarterly savings from reduced ARC licensee fees was realized in Q2, and is it being retained or reinvested?

    $1.5 million in savings was realized in Q2. The savings are being reinvested into future in-house game development, and they contributed to the improvement in gross profit.

    “in Q2, as you mentioned, from April of 2026, we started to have, we saved on the licensing fee of approximately $500,000 on a monthly basis, which is about about 1.5 million. We are actually, you know, for the money that we save, of course, we are reinvesting that into our future gains as well, our in-home development. But the savings definitely improve on our company's gross profit.”

    asked by Michael Kopinski · answered by Unknown Speaker

    2 min read7 chapters

    Detailed Narrative

    01

    Q2 Performance Overview

    Snail, Inc. reported Q2 FY26 net revenue of $19.7 million, down from $22.2 million YoY, primarily due to declines in its ARK franchise titles. Despite this, the company saw a significant improvement in net loss, reducing it to $3 million from $16.6 million YoY, driven by the absence of a large income tax provision and improved gross profit.

    02

    Content Pipeline & Diversification

    The company is actively diversifying its content roadmap beyond the ARK IP. Bellwright, originally an Early Access STEAM title with over 1 million lifetime units sold, successfully launched on PlayStation and Xbox, reaching the top five paid games on Xbox and contributing positively to Q2 revenue. This success reinforces confidence in expanding the portfolio.

    03

    ARK Franchise Updates

    The ARK content pipeline remains active with phased releases for Fantastic Tames Season 1 Pack and Dragontopia DLC throughout Q3 and Q4 2026. Genesis Part 1 DLC also returned to ASA in early July. ARK Maker and ARK: Survival of the Fittest are slated for launch in H2 2026, alongside updates for the ARK animated series.

    04

    PixArc Franchise Expansion

    The PixArc franchise is expanding with PixArc Worlds and the upcoming PixArc TerraCrypt DLC, planned for fall release. TerraCrypt is described as the largest paid DLC expansion for PixArc, introducing over 200 hours of gameplay and 80 new creatures, aiming to extend player progression.

    05

    AAA Title Development

    Snail, Inc. continues to advance three highly anticipated AAA titles: For the Stars, Sutra Immortal, and Nayan Sutra Wuxia. Nayan Sutra Immortal, building on the established Eiji Wushu IP, made its public debut at ChinaJoy, targeting the Chinese gaming market with an open-world sandbox cultivation experience. These titles are positioned as significant growth drivers and steps towards becoming a multi-franchise developer.

    06

    AI Ranch Initiative

    The company introduced its new AI technology initiative, AI Ranch, and unveiled the Non-Human Player (NHP). NHP is an AI companion designed to learn and adapt like a human teammate, observing games without scripts or APIs. This technology aims to enhance gaming experiences by providing personalized AI partners across multiple titles.

    07

    Stablecoin Progress

    The USDO stablecoin initiative is progressing towards launch readiness, with platform infrastructure being built and money transmitter license applications submitted across multiple states. The company is also evaluating real-world on-ramps through crypto APMs in California, aiming to extend technological capabilities into new markets and develop additional revenue streams.

    AI-generated summary of the company’s earnings call. Not investment advice.