Snail, Inc.

Thank you for standing by, and welcome to Snail Inc. First Quarter 2026 Earnings Conference Call and Webcast. I would like to now turn the call over to Stephen Chinesky with Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to Snail Inc.' 's First Quarter 2026 Earnings Conference Call and Webcast. Joining us for today's call are Snail Inc.' 's Chief Executive Officer, Hai Shi, Chief Financial Officer, Heidi Chow, and Senior Vice President, Director of Business Development and Operations, Peter King. The company's first quarter 2026 earnings press release was filed earlier today and is available on the Investor Relations section of Snail Inc.' 's website at www.snail.com or the SEC's website at www.sec.gov/.anchor. 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 as it files with the SEC 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 its events, conditions, or circumstances on which any such 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 will find 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 will turn the call over to Peter Kang, Senior Vice President, Director of Business Development and Operations of Snail. Sir, please proceed.

Thank you, and good afternoon, everyone. Thank you for joining us today to review our financial and operational results for the first quarter ended March 31, 2026. Coming out of the fourth quarter last year, we reinforced the underlying fundamentals of our business. We exited 2025 with a diversified content pipeline that positioned Snail to deliver more predictable, stable growth. We announced a content roadmap for Arc, including new DLCs, content updates, and game modes that stretches through 2027. In parallel, we continue to strengthen Snail's positioning as a developer with several indie titles in development, and more importantly, three AAA titles now in the final phases of their development cycles. For the stars, Nanyan Sutra Immortal and Nanyan Sutra Wushu. I will return to each of these titles later in my remarks. Beginning with ARC, engagement remained consistent across the franchise during the quarter. ASE sold over 573,000 units. Average DAU was 117,000 and peak DAU was 143,000. ASA average DAU was 127,000. Peak DAU was 188,000 and more importantly, ASA total units sold for the quarter rose to 1.4 million, supported in part by the Steam Winter event and the strong momentum from the successful launch of ARK Lost Colony DLC in December 2025. ARK Mobile total downloads were approximately 11.9 million as of the end of the quarter, with average DAU of over 141,000. Over the next two months, we have several ASA updates planned over the coming months. Starting in May is the upcoming Fantastic Canes Season 1 Expansion Pack. Then in June 2026, we plan to release ARK Tides of Fortune, a new ASA DLC. In tandem, we also expect to officially launch the ASA remake of Ark Genesis part one, which will allow us to recognize approximately 11 million in revenue deferred from revenue balance at time of release. Beyond Ark, we released three new indie titles over the past few months. These include Echoes of Elysium on Steam Early Access, Survivor Mercs 1.0 version, and Above the Snow. We also unveiled two new indie titles in development, Dead Party and Gabi Game. While we are pleased with the consistency and stability ARK provides and the steady expansion of our indie portfolio, we are particularly focused about our broader diversified pipeline for the next several years. For many years, ARK has served as the foundational IP of our business. Our long stated strategy has been to build on that foundation and scale into a fully integrated developer and publisher capable of supporting multiple franchises at once. The investments we have made in our organizational development teams over the past several years have been made with that clear goal in mind. The three AAA titles currently in development represent the next major step into that strategy. Each is built with a production scope, depth, and marketing skill required to potentially compete in the same tier as ARK, and each is designed for a multi-year lifespan. As discussed on last quarter's call, these games have now entered the final phase of their development cycles. These three titles are not designed to compete with one another. They address distinct audiences and markets. For the Stars is a global intergalactic experience built around a phased gameplay vision. Nanyin Sutra Immortal and Nanyin Sutra Wushu are based around our historical success with an established IP and a strong user base with our previous launch of Eiji Wushu that has held a stronghold in the Chinese market. This edition represents a two-product strategy on that foundational IP. I will now walk through each individually. Beginning with For the Stars, we recently released a new developer diary featuring perspectives from key designers, engineers, and new pre-alpha gameplay footage alongside unreleased concept art. The game is being built around a vast universe with a strong emphasis on world building that generates an effectively limitless number of solar systems that players can explore and inhabit over time. Development is structured in phases. The initial phase focused on the single player and four to six player co-op experience. The long-term vision evolves the experience into an MMO style ecosystem where large numbers of players online can interact within a shared universe. At a high level, For the Stars is designed as a galactic-scale conquest and grand strategy experience, drawing comparisons to titles like Eve. However, the moment-to-moment gameplay emphasizes hands-on exploration, construction, and progression, evoking the feel of the title No Man's Sky and satisfactory blended together. This combined gameplay experience aims to balance strategic depths with accessible, engaging gameplay that appeals to both hardcore and mainstream audiences. We have a slate of additional announcements planned for For the Stars throughout the year and look forward to sharing further updates as development progresses towards launch. Turning now to our two-product IP strategy with Nyan Sutra Immortal and Nyan Sutra Wushu. The Nian Sutra IP has a large and loyal fan base in China. Its predecessor, Eiji Wuxiu, accumulated more than 85 million registered accounts across PC and mobile and defined the Wuxia genre. The Wuxia genre is characterized by content centered on martial arts, heroes, and ancient China. Fans have been waiting for the next chapter in this franchise for more than a decade. We believe the addressable market for these two titles is substantial. The Chinese gaming market remains highly attractive and many international publishers are consistently seeking meaningful entry points into the audience. Snail Games is historically well positioned. We hold established IP that is beloved with a historical proven user base and development capacity to deliver at scale. Laiyan Sutra Wushu is the closest sequel to the original Age of Wushu game and will return to the core Wushu genre in-universe. The title will replicate the MMORPG model and is intended to directly address long-standing demand from fans over the past 15 years. The title is being built on Unreal Engine 5 with the goal to deliver a cinematic masterpiece that portrays the ancient China wuxia setting at a level that has not previously been achieved in the genre. We expect to deliver more information during Gamescom later this year. Nayan Sutra Immortal will take a different approach around the cultivation genre. Cultivation is a wuxia-adjacent sub-genre focused on the progressive development of supernatural power over time. It is also one of the fastest-growing categories across the broader martial arts space. Nayan Sutra Immortal aims to leverage the existing IP to deliver a new cultivation genre experience that aligns with current gaming trends and preferences in China. The game is also being developed on the Unreal Engine 5. More information will be unveiled during Bilibili World and China Joy events later in the year. The two-genre strategy is intentional. It broadens the addressable audience for the 9-yen sutra IP within China by serving both longtime fans of the original Eiji Wushu and 9-yen IP, alongside a new generation of players drawn to the cultivation and martial arts genres. We believe this approach can support a multi-year to multi-decade lifespan across both titles and meaningfully expand snail games beyond the art franchise. Taken together, the combined potential of these three titles is unlike anything Snail Games has worked on since ARK. As we move through final development, we believe Snail is approaching an inflection point within the next several years to define Snail Games as a multi-franchise developer and publisher. In support of this strategy, I would also like to note that earlier in the month, we amended the exclusive software license agreements for ARC Survival Ascended. Under the amended terms, annual licensing fees will be reduced by 6 million annually going forward. We intend to reinvest the savings into the business with a particular interest towards development of the upcoming titles I have just described. The future is bright, and we look forward to sharing new information across our games in the pipeline while continuing to deliver new immersive content and experiences within ARC. Thank you for joining us today. I will now turn the call over to Heidi to discuss our financial results for the first quarter ended March 31st, 2026. Heidi?