Thank you for standing by, and welcome to Snail Inc.’s Second quarter 2024 earnings conference call and webcast. [Operator instructions] I would now like to turn the call over to Brett Milotte, Senior Vice President at ICR. Please go ahead..

Thank you. Good afternoon and welcome to Snail's second quarter 2024 earnings conference call and webcast. On today's call are Tony Tian, Snail's Co-Chief Executive Officer, Peter Kang, Chief Operating Officer, and Heidi Chow, Chief Financial Officer.

The company's second quarter 2024 earnings press release was filed today with the SEC after the US stock markets closed, and is available on the Investor Relations section of Snail's website. During this call, management may make forward-looking statements regarding future events and the future financial performance of the company.

Actual events and results may differ materially from our expectations, and forward-looking statements are subject to certain risks and uncertainties. Please refer to the company's most recent form 10-Q that was filed today with the SEC, the most recent form 10-K that was filed with the SEC on April 1, 2024, 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 events, conditions, or circumstances on which any statement is based.

Additionally, on today's call, you'll refer to bookings and EBITDA, which are non-GAAP financial measures that provide useful information for the company's investors. You'll find a historical reconciliation of bookings and EBITDA to the corresponding GAAP measures in the earnings press release and the company's SEC filings.

And now, I'll turn the call over to Heidi.

Heidi?.

Survival Ascended. I'll now hand the call over to Peter Kang, our Chief Operating Officer, to review our product roadmap and share some key developments..

Evolved, and hope to be presenting new content in the future. Regarding ARK II, the development is still ongoing, and we will be releasing news about the project as soon as more information becomes available. Lastly, ARK, the animated series, is looking forward to the release of the second part of season one.

With episodes seven through 13 on the slate, fans of the ARK franchise can look forward to more Dino battles as the storyline continues development. I will now pass the call off to Heidi to discuss our financial results in more detail.

Heidi?.

Ascended DLCs and part of the Bob’s Tall Tales, which have not yet been released, partially offset by the recognition of $5.6 million for the release of Scorched Earth. Earnings before interest, taxes, depreciation and amortization, was $3.1 million versus a loss of $4.8 million in the prior year period.

The significant increase in EBITDA was due to an increase in net income of $6.4 million and an increase in the company's tax provision for the income taxes of $1.7 million. As of June 30, 2024, unrestricted cash and cash equivalents was $15.5 million.

To review our detailed financial statements, please refer to the earnings press release and our most recently filed Form 10-Q, which was filed today with the SEC. Thank you for joining us today, everyone. We will now open the call to questions.

Operator?.

[Operator Instructions]. The first question comes from Pat McCann with NOBLE Capital Markets. Please go ahead..

Ascended adoption. As I think you've mentioned before, there were some technological disconnects between the potential user base of ASA and the game based on the processing power that's necessary to run such a complex game on Unreal Engine 5.

I was wondering, could you provide an update to how the adoption of that game is trending, and have there been any changes to your expectations for the adoption period for that game as far as the quarters - going out several quarters and the adoption period maybe taking a little longer than originally expected because some users don't have the high-end PC, how is that going? Is that going as expected or any changes there?.

Survival Evolved..

Great. Thanks for that. And then my other question, or my next question, I guess I should say, was just if we could piggyback on that question with the technological gap.

Would it be fair to look at the launch of ARK II, which of course you haven't stated exactly when that will happen, but out in the future, would it be fair to sort of look at the ASA adoption rate and crossing that technological barrier as kind of a leading indicator for the timing of ARK II, since you sort of have to cross that - you might want to cross that barrier first before you launch the next big launch?.

Ascended, as an indicator on mass adoption for Unreal 5 game engine on a multi-player gameplay. So, yes, you're absolutely right. Once we see that the mass market is ready to accept that Unreal Engine 5 in a multiplayer environment, able to process with the right computing power, that will give us the right market window to launch ARK II..

Great. And f I could squeeze in one more, I was just wondering if you could give any update on how the modding program is going.

Is word of that spreading? And on the other hand, has there been any pushback from users who don't want to pay for mods and that sort of thing? How is the community accepting the program?.

The program is being very well received. Our partners at Overwolf, who are handling the curation of the mods, have reported nothing but great things about the success of our program. Recently, we've launched a Power Rangers mod through the program, which was 100% contributed by a third-party studio, and this mod performed exceptionally.

As we're launching our programs, we have seen other games also launch similar pay for modding programs, and the other titles have not received the amount of support that we have from our community.

We have received no lash-back, no negative reviews about our ecosystem, and allowing content creators to generate revenue from the modding program, whereas the approaches from other competitors have received backlash due to their approach being significantly different from ours..

Great. Much appreciated. Thanks so much for answering the questions..

This concludes our question-and-answer session and today's conference call. Thank you for attending today's presentation. You may now disconnect your lines..