Monday, May 20, 2024
Snail is a leading, global independent developer and publisher of interactive digital entertainment for consumers around the world, with a premier portfolio of premium games designed for use on a variety of platforms, including consoles, PCs and mobile devices.
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Q1 results. The company reported Q1 revenue of $14.1 million, and adj. EBITDA loss of $1.9 million, both of which were lower than our estimates of $24.0 million and $2.8 million, respectively. Notably, the company deferred $5.5 million of revenue in the quarter, which contributed to the shortfall. We expect revenue deferrals and the technology gap to cause some noise in operating results during 2024.
Technology gap. Importantly, we believe there is a technology gap between ASA and some of the user base’s PC equipment, which dampened sales of the game. We believe the closing of the technology gap could also lead to a more steady sales profile of the game over a longer period of time as users upgrade their hardware and migrate to ASA.
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