Snail, Inc.

Greetings and welcome to SNAIL Inc. Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jim Sy, Chief Executive Officer. Thank you. You may begin.

Thank you. Good afternoon and welcome to Snail Inc.' 's third quarter 2022 earnings conference call and webcast. On today's call are Jim Tsai, Snail's chief executive officer, Heidi Chow, Snail's chief financial officer, and Peter King, Snail's chief operation officer, will join us during the Q&A session. By now, everyone should have access to the company's third quarter Q&A 2022 earnings press release filed today after market closed. This is also available on the investor relations section of Snail Inc.' 's website at www.snail.com. During the course of this call, management may make forward-looking statements within the meaning of federal securities laws. These forward-looking statements are subject to the risks and uncertainties as described in the company's press release and other filings with the SEC. On today's call, we will refer to bookings and EBITDA, which are non-GAAP financial measures that provide useful information for our investors. You will find a historical reconciliation of bookings and EBITDA to the corresponding GAAP measures and the earnings press release and the company's SEC filings. And now, I would like to turn the call over to Jim.

Thank you. And hello, everyone. It's a pleasure to speak with you on our first earnings call as a public company. We are a leading global independent developer and publisher of interactive digital entertainment for consumers. We have built a premium portfolio of premium video games designed for use on a variety of platforms, including consoles, PCs, and mobile devices. Only weeks ago, we officially began trading on the NASDAQ. marking a significant milestone for our company, our team, partners, customers, and consumers worldwide. Our mission is to continue to provide high-quality entertainment experiences to audiences around the world. As a leading independent developer and publisher of interactive digital entertainment, we have a strong portfolio of games that are designed to be played on the range of platforms, including consoles, PCs, and mobile devices. In four out of the last six years, our game, Art of Survival Evolved, was a top 25 seller on the Steam platform, and our expertise in technology, in-game ecosystem, and online multiplayer game monetization has allowed us to build a diverse range of intellectual property, against multiple formats and platforms. After survival evolved, our flagship franchise is the leading game with the sandbox survival genre with over 83.2 million consoles and PC install as of September 30th, 2022. As now, we are a team of dreamers with a mission to deliver unmatched gaming experiences and products for the world to enjoy. Our arc series of games are the most popular in the sandbox survival genre because we listen to our customers and partner with top developers to create immersive and entertaining virtual worlds. We have multiple levels for sustained long-term growth. We are working to expand our title to Nintendo Switch and expand genres to develop interactive esports experiences. This includes IP expansion into additional media fronts to boost our portfolio of titles and product offerings. In the medium term, we plan to release game expansion packs for select titles, including launching a new franchise title for our ARK series called ARK 2. Our long-term growth plan is to develop new game titles. We currently have five in the pipeline. R2 will kick off these five additional games, all of which we are targeting to release between 2023 and 2024. I would like to touch a bit more on our series of games. Our dedication to providing audience with high-quality entertainment experience and utilizing the latest gaming technology has produced a strong user engagement, sustained revenues, and meaningful cash flow. Through September 30, 2022, our art franchise, Games, has been played for more than 2.9 billion hours with an average playing time per user of more than 159 hours, and with the top 21% of all players spending over 100 hours in the game, according to data related to the Steam platform. With that being said, we are thrilled to announce that Arc 2 is scheduled and on track for release in 2023. This completely revamped game, developed on Unreal Engine 5, will offer players an immersive gaming experience with improved graphics and a host of new features, including advanced technologies, enhanced animations, and dynamic environments that would evolve based on players' actions. We can't wait for players to experience all the Arc 2 has to offer. Arc 2 will be a console launched exclusively on Xbox. After the first game trailer was released, the game was added to over 1 million user wishlist in 24 hours. We are pleased to see the positive reaction from our fans and are excited to deliver them the next generation of art. We believe that the success of games is dependent on developers' creativity, independence, and their ability to execute their vision consistently. That's why we have been partnering with Studio Walker since 2015, and we are proud of the success of our relationship. This partnership will serve as a model of our future engagement with the new developers. I would like to go ahead and share a few brief accomplishments during the third quarter. We saw 4.4x growth in new installs or 6.4 million installs for Arc Survival Evolved for the third quarter of 2022 versus 1.2 million installed in the prior year period. The continued engagement in our arc title is a testament to our hardworking developers bringing immersive new content and experience to the game. During Q3, we have expanded the Snell team to 85 full-time employees versus 63 full-time employees compared to the end of 2021. We are proud to be a destination for top talent and are excited to continue growing our team as we work towards achieving our mission. We are also pleased to announce that we have entered into agreements with two new development studios, with Hunt and Agasa. These partnerships will continue allow us to focus on the execution and design of our upcoming games up to as well as future gaming products we also remaster art on nintendo switch and also launched the first dlc scotch earth in november 2022 during q4 we successfully completed our initial public offering on the nasdaq raising 15 million in gross per seat. This will allow us to be opportunistic in our approach to M&A, enabling us to strengthen our technology offering, product, IT, media content, and more, so that we can continue to deliver world-class gaming experience to our consumers. In summary, we are excited to build on our existing portfolio of games and titles. This includes acquiring a new IP and providing multi-platform entertainment franchise to create new entertainment mediums for our customers. By listing on NASDAQ, we now have the resource to focus on the execution and design of our next generation games and entertainment experiences. We are currently focused on the development of Arc 2, which will provide our customers with an even better gaming experience and take advantage of recent innovation in game development. With that, let me hand it over to Heidi to review our financial highlights from the quarter.