Thank you for standing by, and welcome to Snail Inc. Third Quarter 2024 Earnings Conference Call and Webcast. 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 Inc.'s Third Quarter 2024 Earnings Conference Call and Webcast. On today's call, we have Tony Tian, Co-CEO; Heidy Chow, Chief Financial Officer; and Peter Kang, Senior Vice President, Director of Business Development and Operations.

The company's third quarter 2024 earnings press release was filed today with the SEC after the U.S. stock market closed and is available on the Investor Relations section of Snail Inc.'s website at www.snail.com or the SEC'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 such statement is based.

Additionally, on today's call, we will refer to bookings and EBITDA, which are non-GAAP measures that provide useful information for the company's investors. You will 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 will turn the call over to Tony Tian, Co-Chief Executive Officer of Sale.

Tony?.

Survival Ascended. As the new DLC content continues to engage with our player base, we are continually optimizing our DLC pipeline to further enhance the ARK experience our players have come to know. Through September 30, 2024, ARK has been played for 3.8 billion hours with an average playing time per user of 162 hours.

Additionally, as we highlighted previously, the top 21.2% of all players have spent over 100 hours immersed in the game, according to data from Steam. We are thrilled with the success of the ARK franchise and to see so many players enjoying our games as indicated by this data.

Before I hand the call over to Peter and Heidy to discuss our results in more detail, let's quickly go over the financials from this quarter. For the third quarter of 2024, Se generated a net revenue of $22.5 million, a notable jump from $9.0 million in the third quarter of 2023.

The increase in net revenue was due to the recognition of $8.2 million in revenue from the release of Aberration and part 2 of Bobs Tall Tales, an increase in total ARK sales of $5.9 million, and also an increase in Bellwright sales of $1.0 million, partially offset by other items outlined in our financial statements.

Net income in the third quarter of 2024 increased significantly to $0.2 million versus net loss of $4.4 million in the third quarter of 2023 as a result of the aforementioned increase in net revenue. Thank you all again for joining.

With that, I will now hand the call over to Peter Kang, our Senior VP, Director of Business Development and Operations, to review our product road map and share some key developments.

Peter?.

The Animated Series, we are excited by the release of part 1 of Season 1 and the feedback from our community. As we look forward, we are even more excited to share with our fans of the ARK franchise, the exciting developments in the storyline as well as more dino battles.

I will now pass the call off to Heidy to discuss our financial results in more detail.

Heidy?.

Survival Ascended and ARK 2. EBITDA for the quarter ended was $500,000 versus a loss of $5.1 million in the prior year period. The $5.6 million or 109.7% an increase in EBITDA was due to our increase in net income and a decrease in the benefit from income taxes of $1.4 million, partially offset by a decrease in interest expenses of $300,000.

As of September 30, 2024, unrestricted cash and cash equivalents was $10.6 million. During the 9 months ended September 30, 2024, the company paid $3 million of its revolving loan and also paid off the convertible debt.

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 all for joining us today. We will now open the line for Q&A.

Operator?.

[Operator Instructions] The first question comes from the line of Michael Kupinski with NOBLE Capital Markets..

I got just a couple here. I just want to know, in terms of the Steam summer sale, I was just wondering how that affected the quarter and the sales. In particular, too, did that affect gross margins because gross margins look like they were just a little bit lower than what I was looking for.

And I was just wondering if you can just comment how successful that Steam summer sale was..

Michael, thank you. That was a great question. Summer sale was great. And then because during the summer, we definitely had sold more units and our gross profit as well. And it did significantly actually improve for the quarter..

Got you. And then I was just wondering, too, in terms of any updates on The Animated Series. I know you're kind of limiting the questions here.

Any updates on The Animated Series viewership, and how well it was received? Any interest for another season? Can you give us an update there as well?.

This is Peter. So the rights to updates on The Animated Series belongs to our distribution partner, Paramount+. So we're not at liberty to disclose. The same goes with viewership numbers. Those analytics are very hard to come by for us.

What we do know is that the second half of the first season is on the slate to be released, and we hope that it's well received by the viewership out there..

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation..