NOTE 3 – REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of revenue

Timing of recognition

The Company recognizes revenue at a point in time for performance obligations that are met at the time of sale or at the time of a release. The Company recognizes revenue over a period based on the estimated service period of the product and additional performance obligations met over time for technical support. Net revenue by timing of recognition during the three and six months ended June 30, 2026 and 2025 were as follows:

 SCHEDULE OF DISAGGREGATION OF REVENUE 

Geography

The Company attributes net revenue to geographic regions based on customer location. Net revenue by geographic region for the three and six months ended June 30, 2026 and 2025 were as follows:

No other individual country accounted for more than 10% of total revenue.

Platform

Net revenue by platform for the three and six months ended June 30, 2026 and 2025 were as follows:

Our net revenues through our current period top four platform providers as a proportion of our total net revenue for the three and six months ended June 30, 2026 and 2025 were as follows:

Snail Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Distribution channel

Our products are delivered through digital online services (digital download, online platforms, and cloud streaming), mobile, and retail distribution and other. Net revenue by distribution channel for the three and six months ended June 30, 2026 and 2025 was as follows:

Deferred Revenue

The Company records deferred revenue when payments are due or received in advance of the fulfilment of our associated performance obligations; reductions to deferred revenue balance were primarily due to the recognition of revenue upon fulfilment of its performance obligations, which were in the ordinary course of business. As of June 30, 2026, the balance of deferred revenue was $33.8 million, of which $32.7 million is due to non-refundable payments. The Company is expecting to recognize $26.0 million of the non-refundable payments in the next 12 to 60 months through the platform releases of certain DLCs. The remaining $3.8 million of current non-refundable deferred revenues and $2.9 million of long term non-refundable deferred revenue will be recognized as revenue primarily on a straight-line basis over the next 12 and 60 months based on our estimates of technical support obligations, the usage of consumable virtual goods and estimated period of time an end user will play the game. The Company’s refundable deferred revenue consists of $1.1 million in advance payments received in accordance with the agreement the Company has made with its retail distributor. This amount has been classified within current deferred revenue, as the terms of the agreement allows retail distributor to request an immediate refund given that the Company’s allotted time period to launch the title has passed. Activities in the Company’s deferred revenue as of June 30, 2026 and 2025 were as follows:

 SCHEDULE OF DEFERRED REVENUE