Group 1 - Azerion has sold its subsidiary Whow Games to DoubleDown Interactive for a total consideration of €65 million, consisting of an upfront payment of €55 million and an earn-out of up to €10 million [1] - The sale is part of Azerion's strategy to reinforce digital advertising as its core business while expanding into cloud infrastructure and AI-driven solutions [2][3] - The company has previously optimized its portfolio, including the divestment of its social card games portfolio in 2023 for €81.3 million [3] Group 2 - Founded in 2014, Azerion has become a major player in digital advertising, generating €551 million in revenue in 2024, a 7% year-on-year increase, with a revenue guidance for 2025 between €600–650 million [4] - In Q1 2025, Azerion reported a 68% growth in EBITDA compared to the same period last year, attributed to a focus on efficiency and profitability [4] - The company has launched Azerion Intelligence, a platform providing affordable cloud hosting and access to open-source AI tools, addressing the growing demand for local alternatives to major cloud providers [5]

Core Viewpoint - DoubleDown Interactive Co., Ltd. has announced the acquisition of WHOW Games GmbH for €55 million (approximately $64.7 million), with potential additional earn-out payments based on performance targets [1][2][5] Group 1: Acquisition Details - The acquisition will be financed through DoubleDown's cash reserves and is expected to close in the third quarter of 2025 [1] - An additional earn-out payment of up to €10 million is contingent upon WHOW Games meeting specific performance targets during the first two years post-acquisition [1] Group 2: Strategic Intent - DoubleDown aims to leverage WHOW Games' expertise in the European market, particularly in Germany, to pursue growth opportunities [2][5] - The acquisition is expected to create synergies by combining operational expertise, marketing capabilities, and gaming content [5][7] Group 3: WHOW Games Overview - WHOW Games, founded in 2014 and headquartered in Hamburg, Germany, reported unaudited revenue of €41.8 million for calendar year 2024 [7] - The company has a diversified portfolio of social casino apps, including proprietary brands like MyJackpot and Lounge777, as well as third-party offerings [4][7][8] Group 4: Market Context - The European social casino market has shown growth in 2023 and 2024, contrasting with the overall market which is in a mature stage [4] - WHOW Games has established strategic partnerships with prominent global brick-and-mortar casino companies, enhancing its market presence [4][8]

Financial Performance - DoubleDown Interactive's LTM (Last Twelve Months) revenue was $341 million[11] - The company's LTM AEBITDA was $142 million[11] - The AEBITDA margin for the LTM period was 41.6%[11] - As of March 31, 2025, the company had approximately $422 million in net cash and short-term investments[11] - Q1 2025 revenue reached $83.5 million, with an adjusted EBITDA of $30.8 million and an adjusted EBITDA margin of 36.9%[35] SuprNation Acquisition - SuprNation's Q1 2025 revenues increased by 59% year-over-year to $13.2 million[28, 29] - The acquisition of SuprNation was completed in October 2023 for $36.5 million in cash[26] Market Opportunity - The casual gaming market is estimated at $22.4 billion, while the social casino games market is $7 billion[22] - The company estimates a $25 billion serviceable iGaming market opportunity[38] Key Metrics - The company has a payer conversion rate of 6.9% as of March 31, 2025[38] - The ARPDAU (Average Revenue Per Daily Active User) is $1.29 as of March 31, 2025[38] - 95% of 2024 revenue was generated by 2010-2023 player cohorts[11, 18]

Core Points - DoubleDown Interactive Co., Ltd. announced a $10,000 donation to the ASPCA to support animal welfare in the United States [1] - The company is organizing a play-to-enter giveaway event called "Giving Meow" on June 18, 2025, to engage players and promote the ASPCA's mission [2] - CEO In Keuk Kim emphasized the company's commitment to animal welfare and the importance of supporting the ASPCA during kitten season [3] - ASPCA's Director of Cause Partnerships, Matthew Carroll, expressed gratitude for the donation, highlighting its significance during a critical time for animal shelters [3] Company Overview - DoubleDown Interactive is a leading developer and publisher of digital games, focusing on mobile and web-based platforms [4] - The flagship product, DoubleDown Casino, has been popular among players, providing a range of classic and modern games [4] - The company also operates real-money iGaming sites in Western Europe through its subsidiary, SuprNation [4]

Group 1 - DoubleDown Interactive (DDI) experienced a significant decline of 23.7% on June 12 following an insider selling shares at $8.50 each, raising questions about its investment potential [1] - Despite the recent drop, there is a belief that DDI remains a viable investment opportunity [1] Group 2 - The investment strategy focuses on GARP (growth at a reasonable price) stocks while also seeking opportunities in other areas [2] - The investment approach does not adhere to a specific time horizon, with positions held as long as the investment thesis remains valid [2] - The analyst has developed market-beating algorithms using Python to identify attractive investment opportunities [2]

Core Viewpoint - DoubleDown Interactive Co., Ltd. has announced a secondary offering of 4,347,827 American Depositary Shares (ADSs) at a price of $8.50 per ADS, with the offering being made by STIC Special Situation Diamond Limited, the Selling Shareholder [1][2]. Group 1: Offering Details - The offering consists entirely of ADSs sold by the Selling Shareholder and will not affect the number of outstanding Common Shares [1]. - The Selling Shareholder has granted underwriters a 30-day option to purchase up to 652,173 additional ADSs at the public offering price [1]. - The offering is expected to close on or about June 13, 2025, subject to customary closing conditions [2]. Group 2: Financial and Regulatory Information - The Company will not receive any proceeds from the sale of the ADSs by the Selling Shareholder [2]. - The ADSs are being offered under a shelf registration statement filed with the SEC on September 14, 2022, which was declared effective on September 27, 2022 [3]. - A prospectus supplement and accompanying prospectus will be filed with the SEC, detailing the terms of the offering [4]. Group 3: Company Overview - DoubleDown Interactive Co., Ltd. is a leading developer and publisher of digital games on mobile and web-based platforms, known for its flagship social casino title, DoubleDown Casino [7]. - The Company provides authentic Vegas entertainment experiences to casual players worldwide through its online social casino [7]. - The subsidiary, SuprNation, operates three real-money iGaming sites in Western Europe [7].

Company Performance - DoubleDown Interactive Co., Ltd. (DDI) reported first-quarter 2025 earnings per share (EPS) of 48 cents, missing the Zacks Consensus Estimate of 55 cents by 12.7% and down from 61 cents in the prior-year quarter [2] - Revenues for the quarter were $83.5 million, which also fell short of the consensus mark of $84 million, representing a 5.2% decline year-over-year [2] - The company's social casino/free-to-play games generated revenues of $70.3 million, down 12% year-over-year, while SuprNation iGaming operations contributed $13.2 million, up 59% year-over-year [2] Financial Metrics - Average revenue per daily active user (ARPDAU) for social casino/free-to-play games increased to $1.29 from $1.26 a year ago, while average monthly revenue per payer decreased by 1.8% year-over-year to $276 [3] - Adjusted EBITDA decreased to $30.8 million from $32.7 million in the year-ago quarter, with the adjusted EBITDA margin contracting by 20 basis points to 36.9% [4] - Total operating expenses decreased to $53.9 million from $57 million year-over-year, primarily due to lower revenues and reduced research and development expenses [4] Cash Position - As of March 31, 2025, DDI had cash and cash equivalents of $365.7 million, an increase from $334.9 million as of December 31, 2024 [5] - Net cash from operating activities for the first quarter was $41.1 million, compared to $35.7 million in the year-ago period [5]

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]

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]

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]