Wed, May 14, 9:36 PM (35 days ago)
**Snail, Inc. (SNAL) Q1 2025 Financial Summary** **Financial Health & Performance:** - **Revenue:** $20.1 million, up 42.5% YoY. - **Net Loss:** $1.9 million, slightly higher than $1.8 million in Q1 2024. - **Gross Profit:** $5.8 million, a significant increase of 181.9% YoY. - **Operating Expenses:** $9.9 million, up 132.3% YoY. - **Cash Flow from Operations:** $0.8 million, down 88.5% YoY. **Profit Margins:** - **Gross Margin:** 28.9%, improved from 14.6% in Q1 2024. - **Operating Margin:** -20.4%, worse than -15.7% in Q1 2024. **Cash Flow:** - **Operating Cash Flow:** $0.8 million, down from $6.8 million in Q1 2024. - **Investing Cash Flow:** -$1.9 million, primarily due to software and license acquisitions. - **Financing Cash Flow:** $3.1 million, mainly from convertible notes issuance. **Earnings Changes:** - **EPS:** -$0.06, slightly worse than -$0.05 in Q1 2024. - **Diluted EPS:** -$0.06, same as Q1 2024. **Quarterly Performance Discussion:** - **Revenue Growth:** Driven by ARK franchise sales and new DLC releases. - **Expenses:** Increased due to higher stock-based compensation, R&D, and marketing expenses. - **Cash Flow:** Decline in operating cash flow due to changes in working capital and non-cash items. **Trends & Uncertainties:** - **Positive Trends:** Strong user engagement and growth in ARK franchise. - **Uncertainties:** Dependence on third-party platforms, potential breaches of debt covenants, and need for additional financing. **Future Operations Impact:** - **Growth Strategies:** Focus on expanding gaming pipeline, developing new content, and enhancing technology platform. - **Financial Strategy:** Potential renegotiation of debt, issuance of additional convertible notes, and equity line of credit. **Key Metrics:** - **Daily Active Users (DAUs):** 243,000 for ARK games, up from 209,000 in Q1 2024. - **Units Sold:** 1.5 million, up 44.8% YoY. - **Bookings:** $22.2 million, up 13.6% YoY. **Valuation (as of Q1 2025):** - **Market Cap:** Approximately $10.5 million (based on 28.7 million shares outstanding and a stock price of $0.36). - **Enterprise Value:** Approximately $13.5 million (considering cash and debt). **Conclusion:** Snail, Inc. showed strong revenue growth in Q1 2025, driven by its ARK franchise. However, increased expenses and a decline in operating cash flow are concerns. The company faces uncertainties related to debt covenants and financing needs. Future growth strategies focus on expanding content and technology, but financial stability remains a key challenge.