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DoubleDown Interactive(DDI) - 2025 Q1 - Earnings Call Transcript
2025-05-13 22:02
Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2025 was $83.5 million, a decrease from $88.1 million in Q1 2024, reflecting a 12% decline in social casino revenues and a 59% increase in iGaming revenues [6][13] - Adjusted EBITDA for Q1 2025 was $30.8 million, down from $32.7 million in the prior year, with an adjusted EBITDA margin of 36.9% compared to 37.1% in Q1 2024 [16] - Cash flow from operations increased to $41.1 million, up more than $5 million from Q1 2024 [7][17] Business Line Data and Key Metrics Changes - Social casino free-to-play games generated $17.3 million, while iGaming business Super Nation generated $13.2 million, marking the highest quarterly performance since its acquisition [6][9] - Average revenue per daily active user (ARPDAU) increased to $1.29 in Q1 2025 from $1.26 in Q1 2024, and payer conversion rate rose to 6.9% from 6.4% [13][14] - Direct-to-consumer revenue accounted for over 10% of social casino business, with a target to exceed 15% by 2025 [8][9] Market Data and Key Metrics Changes - Super Nation's revenue growth was driven by increased investments in new player acquisition, particularly in the UK and Sweden [9][24] - The company noted that the competitive landscape for user acquisition costs has intensified due to increased spending by sweepstakes game publishers [15][41] Company Strategy and Development Direction - The company aims to maintain capital efficiency while focusing on product improvements and live operations enhancements to sustain its competitive position [18] - There are ongoing discussions regarding potential acquisitions to diversify revenue and cash flow sources [10][29] - The company has decided not to launch a new match-three style game after extensive testing, emphasizing a cautious approach to game development [10][51] Management's Comments on Operating Environment and Future Outlook - Management expects to continue generating attractive free cash flow and strengthen the balance sheet while exploring growth opportunities in adjacent gaming categories [19] - The first half of 2025 is anticipated to be challenging for social casino growth due to tough year-over-year comparisons, but conditions are expected to improve in the second half [14][39] Other Important Information - The company switched its financial reporting from GAAP to IFRS, which has generally insignificant implications for financial statements [4][12] - As of March 31, 2025, the company had $455.7 million in cash and short-term investments, with a net cash position of approximately $422 million [17] Q&A Session Summary Question: Trends in Super Nation's markets and major sporting events - Management noted that the investment in acquiring new players has yielded a quick ROI, allowing continued marketing investment, particularly in Sweden and the UK [24][25] Question: Update on M&A opportunities - The flow of opportunities remains strong, with interest in both iGaming and casual games, and no recent changes in the M&A environment [29][30] Question: Expectations for Super Nation's growth and sales/marketing spending - Management expects to continue investing at or above current levels, anticipating revenue results from that investment [35] Question: Rate of decline for social casino business - The first half of the year presents the toughest comparisons, but management believes conditions will improve in the second half [39] Question: Impact of user acquisition costs and competition - Increased user acquisition costs are primarily affecting new user acquisition, with no clear evidence of churn from existing players [41]
DoubleDown Interactive(DDI) - 2025 Q1 - Earnings Call Transcript
2025-05-13 22:02
Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2025 was $83.5 million, a decrease from $88.1 million in Q1 2024, reflecting a 12% decline in social casino revenues and a 59% increase in iGaming revenues [6][12] - Adjusted EBITDA for Q1 2025 was $30.8 million, down from $32.7 million in the prior year, with an adjusted EBITDA margin of 36.9% compared to 37.1% in Q1 2024 [15][16] - Cash flow from operations increased to $41.1 million, up more than $5 million from Q1 2024 [7][16] - Profit excluding non-controlling interest was $23.9 million, or $9.65 per diluted share, compared to $30.3 million, or $12.24 per diluted share in Q1 2024 [15] Business Line Data and Key Metrics Changes - Social casino free-to-play games generated $17.3 million, while iGaming business Super Nation generated $13.2 million, marking the highest quarterly performance since its acquisition [6][9] - Average revenue per daily active user (ARPDAU) increased to $1.29 in Q1 2025 from $1.26 in Q1 2024, and payer conversion rate rose to 6.9% from 6.4% [12][8] - Direct-to-consumer revenue accounted for over 10% of social casino business, with a target to exceed 15% by 2025 [8][9] Market Data and Key Metrics Changes - Super Nation's revenue growth was driven by increased investments in new player acquisition, particularly in the UK and Sweden [9][23] - The company noted that the iGaming market presents significant opportunities for growth, especially in regulated European markets [9][10] Company Strategy and Development Direction - The company aims to maintain capital efficiency while focusing on product improvements and live operations enhancements to sustain its competitive position [17] - There is an ongoing strategy to explore potential acquisitions to diversify revenue and cash flow sources [10][17] - The company has decided not to launch a new match-three style game after extensive testing, emphasizing a cautious approach to new game development [10][48] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in achieving year-over-year growth in the social casino segment due to strong performance in the previous year [13] - The company expects to continue generating attractive free cash flow and strengthen its balance sheet while pursuing growth opportunities [18] - Management remains optimistic about the scalability and profitability of the iGaming business as it continues to grow [17] Other Important Information - The company switched its financial reporting from GAAP to IFRS starting Q4 2024, with minimal implications for financial statements [4][11] - Operating expenses for Q1 2025 were $53.9 million, down from $57 million in Q1 2024, reflecting lower R&D expenses and cost of revenue [14] Q&A Session Summary Question: Trends in Super Nation's markets and major sporting events - Management noted strong ROI from new player acquisition investments and expressed satisfaction with marketing spend in Q1 [23] Question: Update on M&A opportunities - The company continues to see a flow of opportunities in both iGaming and casual games, with no recent changes in interest [28] Question: Expectations for Super Nation's growth and sales/marketing spending - Management expects to maintain or increase investment levels in Super Nation, anticipating continued revenue growth [33] Question: Rate of decline in social casino business - Management indicated that the first half of the year presents tough comparisons, but expects easier comps in the second half [36] Question: User acquisition costs and competition from sweepstakes - Management acknowledged rising user acquisition costs due to competition but could not confirm player losses to sweepstakes [39]
DoubleDown Interactive(DDI) - 2025 Q1 - Earnings Call Transcript
2025-05-13 22:00
Financial Data and Key Metrics Changes - The company reported consolidated revenue of $83.5 million for Q1 2025, a decline from $88.1 million in Q1 2024, reflecting a 12% decrease in social casino revenues and a 59% increase in iGaming revenues [6][12][14] - Adjusted EBITDA for Q1 2025 was $30.8 million, down from $32.7 million in the prior year, with an adjusted EBITDA margin of 36.9% compared to 37.1% in Q1 2024 [16] - Cash flow from operations increased to $41.1 million, up from $35.7 million in Q1 2024, indicating strong cash flow conversion [7][17] Business Line Data and Key Metrics Changes - Social casino free-to-play games generated $70.3 million in revenue, while iGaming business Super Nation generated $13.2 million, marking the highest quarterly performance since its acquisition [6][9][12] - Key monetization metrics for the social casino business improved, with ARPDAU increasing to $1.29 and payer conversion rate rising to 6.9% [8][13] Market Data and Key Metrics Changes - Super Nation's revenue growth was driven by increased investments in new player acquisition, particularly in the UK and Sweden [9][24] - The company noted that the competitive landscape for user acquisition costs has intensified due to increased spending by competitors in the sweepstakes gaming sector [41] Company Strategy and Development Direction - The company aims to maintain capital efficiency while focusing on product improvements and live operations enhancements in Double Down Casino [18] - There is an ongoing strategy to explore potential acquisitions to diversify revenue and cash flow sources [10][30] - The company has decided not to launch a new match-three style game after extensive testing, emphasizing a cautious approach to new game development [10][48] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the first half of 2025 presents tough comparisons due to strong performance in the prior year, but expects easier comparisons in the second half [39] - The company remains optimistic about the potential for iGaming businesses to become highly profitable at scale, with plans to continue investing in player acquisition [18][36] Other Important Information - The company transitioned to reporting financial results in accordance with IFRS, which has minor implications for financial statements compared to GAAP [4][11] - As of March 31, 2025, the company had $455.7 million in cash and short-term investments, with a net cash position of approximately $422 million [17] Q&A Session Summary Question: Trends in Super Nation's markets and major sporting events - Management noted strong returns on investment in player acquisition and highlighted the rapid payback from marketing efforts in Sweden and the UK, but indicated that there are no major event-based revenue drivers [24][27] Question: Update on M&A opportunities - The company continues to see a flow of opportunities in both iGaming and mobile gaming, with no significant changes in interest or opportunities despite macroeconomic uncertainties [30] Question: Expectations for Super Nation's growth and sales/marketing spending - Management expressed confidence in maintaining or increasing current levels of investment in player acquisition, expecting continued revenue growth from Super Nation [36] Question: Social casino business decline expectations - Management acknowledged the challenges in growing the social casino business year-over-year but indicated that comparisons will improve in the second half of the year [39] Question: User acquisition costs and competition - Management noted that user acquisition costs have risen due to competition from sweepstakes games, but it is difficult to quantify player losses to these competitors [41]
DoubleDown Interactive Reports First Quarter 2025 Financial Results
Globenewswire· 2025-05-13 20:05
Core Viewpoint - DoubleDown Interactive Co., Ltd. reported its unaudited financial results for Q1 2025, showing a revenue decline compared to the previous year, but strong cash flow generation and growth in its iGaming subsidiary, SuprNation [1][3][4]. Financial Performance Summary - Revenue for Q1 2025 was $83.5 million, down from $88.1 million in Q1 2024, with social casino/free-to-play games revenue at $70.3 million, a 12% decline year-over-year [6][7]. - SuprNation's revenue increased by 59% year-over-year to $13.2 million, driven by new player acquisition efforts in Sweden and the U.K. [4][6]. - Operating expenses decreased to $53.9 million in Q1 2025 from $57.0 million in Q1 2024, mainly due to lower costs associated with revenue and R&D [6][7]. - Profit for the interim period was $23.8 million, or $9.62 per fully diluted common share, compared to $30.3 million, or $12.24 per share, in the prior year [6][7]. - Adjusted EBITDA for Q1 2025 was $30.8 million, down from $32.7 million in Q1 2024, with an adjusted EBITDA margin of 36.9% [6][7]. Cash Flow and Financial Position - The company generated $41.1 million in cash flow from operations, an increase from $35.7 million in Q1 2024 [6][7]. - As of the end of Q1 2025, DoubleDown had a net cash position of approximately $421 million, equating to about $8.51 per American Depositary Share (ADS) [5][6]. - The average revenue per daily active user (ARPDAU) for social casino/free-to-play games increased to $1.29 from $1.26 year-over-year [6][7]. Non-Financial Performance Metrics - Average monthly revenue per payer decreased to $276 in Q1 2025 from $281 in Q1 2024 [6][7]. - The payer conversion rate improved to 6.9% from 6.4% year-over-year [7]. - Average monthly active users (MAUs) decreased to 1,238,000 from 1,478,000 in the previous year, while daily active users (DAUs) fell to 608,000 from 699,000 [7].
DoubleDown Interactive to Report 2025 First Quarter Results on May 13 and Host Conference Call and Webcast
Globenewswire· 2025-04-29 20:15
Core Viewpoint - DoubleDown Interactive Co., Ltd. is set to release its first quarter financial results for 2025 on May 13, 2025, and will host a conference call to discuss these results and provide a business update [1]. Financial Results Announcement - The financial results will be released after market close on May 13, 2025 [1]. - A conference call and webcast will take place at 5:00 p.m. ET (2:00 p.m. PT) on the same day, open to the general public [1]. Accessing the Conference Call - Interested participants can register for the call through a provided link, after which they will receive dial-in details and a unique access code [2]. - It is recommended to register at least 15 minutes before the call starts to ensure connection [2]. Webcast Availability - A simultaneous webcast of the conference call will be available on the company's website, with a replay accessible shortly after the event [3]. Company Overview - DoubleDown Interactive is a prominent developer and publisher of digital games, focusing on mobile and web-based platforms [4]. - The company is known for its flagship social casino game, DoubleDown Casino, which has entertained millions of players globally [4]. - The SuprNation subsidiary operates three real-money iGaming sites in Western Europe [4].
DoubleDown Interactive(DDI) - 2024 Q4 - Annual Report
2025-04-21 20:05
Revenue and Market Performance - DoubleDown Casino generated 88.6% of total revenue in 2024, down from 96.3% in 2023, indicating a need for diversification [34] - The average revenue per daily active user (ARPDAU) was $1.30 during 2024, indicating higher monetization compared to peers in the social casino segment [169] - The acquisition of SuprNation in October 2023 contributed $33.0 million in revenue for the year ended December 31, 2024, representing almost 10% of the company's total revenue [172] - The global social casino market was estimated at approximately $7.2 billion in 2024, with the company's DoubleDown Casino ranked fifth among top game titles by gross revenue [168] - Consumer spending on gaming is estimated to reach approximately $178 billion in 2024, with around 55% generated by mobile device activity [178] User Engagement and Player Metrics - The average monthly paying users (MPUs) for social casino games decreased from 2023 to 2024, while the payer conversion rate increased from 6.0% to 6.7% [33] - The company reported an average of 1.4 million monthly players in 2024, with a total of over 119 million installations of its games to date [167] - The company employs a data-driven approach to optimize user acquisition and engagement, enhancing gameplay and monetization through real-time analytics [182] - The company aims to grow revenue from SuprNation by expanding player engagement through localized marketing strategies and optimizing user experience [173] Regulatory and Legal Risks - The company faces risks from social opposition to interactive gaming, which could lead to regulatory changes affecting operations [40] - Legal proceedings and data privacy regulations could increase operational costs and impact financial performance [32] - The company is currently defending against three lawsuits in Alabama, Kentucky, and Tennessee, alleging that its social casino games constitute unlawful gambling [58] - The Washington State Gambling Commission issued a memo in January 2025 asserting that games involving "wagers" of virtual currency may be illegal under state law, impacting the company's licenses with IGT [61] - The company is subject to inquiries from regulatory agencies regarding compliance with state and federal laws, including a Civil Investigative Demand from the Washington State Attorney General's Office [60] Intellectual Property and Licensing - The company has licensing agreements with IGT and DUG, with approximately 50 game titles actively offered as of December 31, 2024 [45] - The company relies on the protection of its proprietary information and intellectual property, which includes patents, trademarks, and copyrights [47] - The company's future success depends on its ability to retain or expand intellectual property licenses, which may not be available on commercially reasonable terms [46] - The company licenses approximately 320 slot gaming intellectual property rights from IGT, which are actively offered through its game titles [221] Competition and Market Position - The company operates in a highly competitive industry with low barriers to entry, facing competition from established online gaming companies and new entrants [90] - The company faces significant competition from major players like Playtika, Flutter, and Electronic Arts in the social casino and iGaming markets [217] - The company plans to expand into adjacent gaming segments and regulated markets to capture a larger share of the fast-growing mobile games market [190] Operational Challenges and Costs - The company must invest significantly in research and development to refresh existing games and launch new titles to maintain player engagement [34] - Compliance with iGaming regulations is costly and time-consuming, with potential for substantial fines and operational impacts if regulations are not met [71] - The costs associated with compliance and potential legal liabilities could adversely affect the company's operations and financial condition [78] - The company may incur additional expenses related to legal and professional services due to ongoing investigations and legal matters [62] Technology and Development - The company operates on a shared code base, improving speed to market and minimizing development costs [209] - The technology and content development team aims to reduce reliance on third-party licensing by developing proprietary intellectual property [213] - Technology and content development expenditures were approximately $13.9 million in 2024 and $21.2 million in 2023 [214] Financial and Corporate Governance - The company does not currently intend to pay dividends on its common shares for the foreseeable future, as it plans to invest future earnings to fund growth [143] - The company is classified as a "controlled company" under NASDAQ rules, allowing it to follow home country practices instead of certain corporate governance standards [130] - Holders of American Depositary Shares (ADSs) have limited rights compared to shareholders under Korean law, affecting their ability to vote and receive dividends [144] Economic and Market Trends - Consumer demand for entertainment and social casino games is sensitive to economic downturns, impacting discretionary spending [106] - Inflation in the U.S. and global markets has been high, affecting costs for R&D and talent acquisition, which may lead to reduced in-game purchases by players [107] - The proliferation of mobile devices is crucial for the company's growth, and any decline in mobile device popularity could adversely affect revenue [89] Cybersecurity and Data Privacy - Cybersecurity threats pose significant risks, with potential for data breaches leading to loss of players and revenue, as well as reputational harm [80] - The company may need to invest further in cybersecurity measures to protect data and infrastructure, impacting operational costs [82] - Non-compliance with data privacy laws could result in governmental investigations, litigation, and significant liability [79]
DoubleDown Interactive: A Cash Cow Trading For A Bargain
Seeking Alpha· 2025-03-31 07:55
Group 1 - The company focuses on value investing with a concentrated portfolio, seeking rare and exceptional buying opportunities [1] - The investment strategy employs net current asset value analysis and conservative discounted cash flow calculations [1] - The company has a background in IT and computer science, which enhances its investment focus in the technology sector [1] Group 2 - The company aims to summarize and understand its investments while helping others learn about the value investing process [1]
DoubleDown Interactive Announces Results of 2025 Annual General Meeting
Globenewswire· 2025-03-27 11:00
SEATTLE, March 27, 2025 (GLOBE NEWSWIRE) -- DoubleDown Interactive Co., Ltd. (NASDAQ: DDI) ("DoubleDown" or the "Company"), a leading developer and publisher of digital games on mobile and web- based platforms, announced today that at its annual general meeting of shareholders held on March 27, 2025 at 11:00 a.m., Korea Standard Time (March 26, 2025 at 10:00 p.m., U.S. Eastern Time) in Seoul, Korea, the following actions were taken by the shareholders of record as of December 31, 2024 on the proposed resolu ...
DoubleDown Interactive: Strong Buy On Valuation, Growth Potential
Seeking Alpha· 2025-03-17 14:07
I originally added DoubleDown Interactive ( DDI ) to my value portfolio on November 6, 2023. Since that time the stock more than doubled but has recently fallen back. Today I update my take on the company, beginning with aI'm a private trader interested in both long and short ideas. My training and background are in engineering including several decades of consulting engineering practice. I endeavor to apply my analytical skills to investing/trading, which I've done for 20+ years and to which I bring a cont ...
DoubleDown Interactive to Participate in Upcoming Investor Conferences
Globenewswire· 2025-03-11 15:00
SEOUL, South Korea, March 11, 2025 (GLOBE NEWSWIRE) -- DoubleDown Interactive (NASDAQ: DDI) (“DoubleDown” or the “Company”), a leading developer and publisher of digital games on mobile and web-based platforms, announced today that Chief Financial Officer, Joe Sigrist, will participate in two upcoming institutional investor conferences: 37th Annual Roth Conference Location: The Laguna Cliffs Marriot Resort & Spa - Dana Point, CADate: Tuesday, March 18, 2025Format: One-on-one meetings with institutional inve ...