DoubleDown Interactive Co. (NasdaqGS:DDI) Q4 2025 Earnings call February 11, 2026 05:00 PM ET Company ParticipantsEric Gregg - Founder and Sole OwnerIn Keuk Kim - CEOJoe Jaffoni - Investor Relations AdvisorJoseph Sigrist - CFOConference Call ParticipantsAaron Lee - Senior Research AnalystDavid Bain - AnalystEric Owen Handler - Managing Director and Senior Research AnalystJosh Nichols - Senior Research AnalystOperatorGood afternoon and welcome to DoubleDown Interactive's earnings conference call for the four ...

Financial Data and Key Metrics Changes - Consolidated revenue for Q4 2025 was $95.8 million, up 17% year-over-year, with adjusted EBITDA of $40.6 million, up 16% year-over-year [6][11] - Net cash flow from operations was $42.6 million in Q4 2025, bringing the total for the full year to $136.8 million [7][16] - Profit excluding non-controlling interests decreased 31% to $24.7 million, with earnings per fully diluted common share of $9.72 compared to $14.40 in Q4 2024 [15] Business Line Data and Key Metrics Changes - Social casino revenue grew 9% year-over-year to $79.7 million, driven by the contribution from WHOW Games [7][11] - iGaming revenue from SuprNation was $16.1 million, up 78% year-over-year [9][11] - The payer conversion rate for social casino increased to 9.6% in Q4 2025 from 6.9% in Q4 2024, while average monthly revenue per payer decreased to $198 from $282 [8][13] Market Data and Key Metrics Changes - The overall social casino market faced growth challenges, but there is potential for growth outside the United States, particularly in Europe [8] - WHOW Games has a higher direct-to-consumer (DTC) revenue component due to its web-based history, contributing to the overall DTC revenue exceeding 30% of total social casino revenue in Q4 [9] Company Strategy and Development Direction - The company aims to innovate and enhance its social casino and iGaming businesses through product improvements and marketing strategies [17] - There is a focus on increasing DTC revenue as a percentage of overall social casino revenue in 2026 [9][33] - The company is evaluating potential acquisitions while maintaining a strong balance sheet and cash position [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the social casino sector but emphasized the importance of efficiency and innovation for profitability [24] - AI is being integrated into workflows to enhance content production, player experience, and marketing optimization [25][26] - The company is mindful of the disciplined approach to marketing spend and player acquisition, especially in light of changing gaming regulations [30][46] Other Important Information - Operating expenses increased to $65.9 million in Q4 2025, primarily due to impairment loss recognized for SuprNation's goodwill [14] - The goodwill write-down for SuprNation was approximately $8 million, reflecting third-party valuation assessments [51] Q&A Session Summary Question: Can you bifurcate DoubleDown Casino and WHOW revenue contribution and growth? - Management indicated that both entities performed well, with WHOW Games having a high DTC mix due to its web-based player engagement [19][20] Question: What is the company's approach to AI and automation? - Management highlighted that AI is being used to enhance content production, personalize player experiences, and optimize marketing efforts [25][26] Question: Is the moderation in customer acquisition spend for SuprNation temporary or a shift towards profitability? - Management confirmed that the moderation is a disciplined response to ROI measurements, with ongoing adjustments based on market conditions [30] Question: How does the company view the promotional landscape in light of recent legislative changes? - Management noted that while marketing costs have increased, the pressure from sweepstakes legislation has lessened somewhat [46] Question: What is the company's stance on capital allocation and potential buybacks? - Management emphasized that long-term shareholder value is a priority, with ongoing discussions about capital returns and M&A strategies [37][38]

Financial Data and Key Metrics Changes - The company reported consolidated revenue of $95.8 million for Q4 2025, representing a 17% increase year-over-year from $82.0 million in Q4 2024 [5][11] - Adjusted EBITDA for Q4 2025 was $40.6 million, up 16% year-over-year, with an adjusted EBITDA margin of 42.3% compared to 42.8% in Q4 2024 [5][15] - Net cash flow from operations was $42.6 million in Q4 2025, bringing the total for the full year to $136.8 million [6][16] - Profit excluding non-controlling interests decreased by 31% to $24.7 million, with earnings per fully diluted common share of $9.72, down from $14.40 in Q4 2024 [14][15] Business Line Data and Key Metrics Changes - Social casino revenue grew 9% year-over-year to $79.7 million, driven by the first full quarter contribution from WHOW Games [6][11] - iGaming revenue from SuprNation was $16.1 million, up 78% year-over-year, although it remained flat compared to Q3 2025 [9][11] - The payer conversion rate for social casino increased to 9.6% in Q4 2025 from 6.9% in Q4 2024, while average monthly revenue per payer decreased to $198 from $282 [7][12] Market Data and Key Metrics Changes - The overall social casino market faced growth challenges, but the company sees potential for growth outside the United States, particularly in Europe [8] - The company noted that WHOW Games has a higher direct-to-consumer (DTC) revenue mix due to its web-based history, contributing to the overall DTC revenue exceeding 30% of total social casino revenue in Q4 [9][20] Company Strategy and Development Direction - The company aims to innovate and enhance its social casino and iGaming businesses through product improvements and marketing strategies [17] - The focus remains on increasing DTC revenue as a percentage of overall social casino revenue, with plans to optimize the business further in 2026 [9][34] - The company is evaluating potential acquisitions while maintaining a strong balance sheet and cash position [17][38] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the need for disciplined spending in player acquisition, particularly in the iGaming segment, while also addressing changes in gaming tax regulations in the UK [32] - The company is leveraging AI to enhance content production, live operations, and marketing optimization, aiming to improve decision quality and returns across the business [25][26] - Management emphasized the importance of maintaining profitability while pursuing growth opportunities in a mature market [23][39] Other Important Information - The company recognized an impairment loss of approximately $8 million related to SuprNation's goodwill, despite the business showing robust growth [15][52] - The company holds a net cash position of approximately $455 million as of December 31, 2025, equating to about $9.19 per ADS [16] Q&A Session Summary Question: Can you bifurcate DoubleDown Casino and WHOW revenue contribution and growth? - Management indicated that both segments performed well, with WHOW Games contributing significantly to DTC revenue, but they will not specifically quantify the revenue from each segment going forward [19][20] Question: What is the company's approach to AI and automation? - Management highlighted that AI is being integrated into content production, live operations, and marketing optimization to enhance efficiency and decision-making [24][25] Question: Is the moderation in customer acquisition spend for SuprNation temporary or a shift towards profitability? - Management confirmed that the moderation is a disciplined approach to measuring ROI on player acquisition, indicating a focus on profitability moving forward [29][30] Question: What is the long-term margin structure for SuprNation? - Management noted that they will continue to monitor and adjust marketing spend based on ROI, with a focus on maintaining profitability while exploring growth opportunities [30][32] Question: Why is there a delay in capital returns such as buybacks or dividends? - Management stated that the focus remains on long-term shareholder value through M&A strategies, with discussions ongoing about potential capital returns as the cash balance grows [38][39]

Core Insights - Expanse Studios has signed a content distribution agreement with Lobbet, enhancing its presence in the regulated Montenegrin market through the DualSoft platform [1][2][3] Group 1: Agreement Details - The agreement allows Lobbet to integrate Expanse Studios' proprietary iGaming content into its online offerings, increasing the availability of Expanse titles in Montenegro [2] - DualSoft will facilitate the distribution and technical integration, enabling scalable deployment across its operator network [2][3] Group 2: Strategic Implications - This transaction strengthens Expanse Studios' position in regulated European markets and aligns with Golden Matrix Group's B2B growth strategy [3] - DualSoft serves over ten active operators across multiple regulated jurisdictions, indicating a high-potential distribution channel [3] Group 3: Company Background - Expanse Studios is a B2B iGaming content provider with a portfolio of over 56 proprietary titles, supporting more than 1,300 casino brands globally [6] - Lobbet operates as a leading sports betting and gaming operator in Montenegro, with over 100 retail locations and a workforce of more than 300 employees [7]

Core Insights - Expanse Studios, a subsidiary of Golden Matrix Group Inc., has launched Super Heli Premium, an enhanced version of its popular crash game, aimed at increasing player engagement and retention without additional promotional costs [1]. New Game Mechanics - The game introduces four new gameplay mechanics: - Over/Under allows players to predict if the crash multiplier will exceed a certain threshold, with maximum bet multipliers reaching up to 24x [2]. - Range betting enables players to guess the multiplier range for the helicopter's flight, offering different strategies for conservative and aggressive players [3]. - 50% Cash-Out allows players to secure half their stake at any multiplier during active rounds, reducing pressure and extending session length [4]. - Auto Play and Auto Cash-Out provide preset betting options for a more hands-off experience [4]. Regional Customization - Operators can implement market-specific visual themes for regions such as the USA, Greece, Egypt, Brazil, and Japan, while maintaining the core mechanics and a 97% RTP [5]. Market Context - The original Super Heli game quickly became a top title in European iGaming, with operators reporting above-average session lengths and improved retention metrics [6]. - Super Heli Premium is designed as a platform, allowing operators to adjust volatility, bet limits, and themes to cater to specific player demographics without needing separate game integrations [6]. Company Operations - Expanse Studios has over 1,300 B2B partnerships globally, adding more than 300 new operators in Q3 2025, and now boasts a portfolio of 66 proprietary titles, all fully owned [7]. - The game is currently live across Expanse's operator network in key markets worldwide [7].

Industry Overview - The American iGaming industry is still growing and has not yet reached maturity compared to its European counterparts [1] - The analysis focuses on the four strongest stocks in American iGaming and their potential performance by 2026 [1] DraftKings – DKNG - DraftKings started as a fantasy sports service and expanded into sports betting and online casino services following the easing of betting restrictions in 2018 [3] - The stock is currently trading in the $35 to $36 range, with previous highs of $47 and $53 in 2025 [4] - DraftKings is entering the predictions market, driven by services like Kalshi and Polymarket, and plans to offer this in regions where sports betting is not available [4] - Anticipated boost in usage during the FIFA World Cup, co-hosted by the US, with a moderate buy recommendation targeting $44 [5] FanDuel – FLUT - FanDuel has transitioned from a fantasy sports service to a comprehensive iGaming platform, focusing heavily on online casino technology [6] - The stock is trading in the $215 to $219 range, with expectations for growth due to consistent profitability and favorable regulatory trends [7] - Rated as a strong buy with a price target of $300 for the year [7] BetMGM – MGM - BetMGM, associated with the MGM brand, has been expanding its online casino experience since 2018 and has formed partnerships with major sports leagues [8] - The focus for 2026 is on achieving a $500 million positive EBITDA, which could lead to a re-rating of the stock [9] theScore Bet – PENN - theScore Bet operates in the US under Penn Entertainment and is focusing on a lean, efficient operation after exiting an ESPN partnership [11] - The strategy involves cutting excess and leveraging technology for profitability, with a loyal customer base in Ontario [12] - The launch of a new iGaming market in Alberta could impact its operations, leading to a speculative buy rating [12]

Core Insights - Plaee has formed a strategic partnership with Crypto.com to develop a prediction market technology infrastructure compliant with CFTC standards [1] Group 1: Partnership Details - The collaboration will utilize Plaee's technology to onboard operators, including fintech platforms and traditional trading brokers, for federally regulated event-based trading in the US [2] - The integration will include Crypto.com's institutional liquidity and regulatory framework, enhancing Plaee's offerings [2][4] Group 2: Market Potential - The US prediction market sector is projected to reach $1 trillion in trading volume within a few months, indicating a growing demand for compliant and user-friendly technology platforms [3] - The current demand for such technology is at an all-time high (ATH) [3] Group 3: Technological Advancements - The partnership provides a "plug-and-play" API-first architecture, enabling operators to implement advanced prediction market technology within weeks, covering various sectors like sports, politics, and macroeconomics [4] - Trades executed through Plaee's technology will meet high regulatory compliance standards, addressing key challenges for operators such as regulatory complexity, liquidity, and time-to-market [5] Group 4: Recent Developments - Crypto.com has been actively securing partnerships, including a recent deal with Stripe to facilitate cryptocurrency payments in online shopping and another with High Roller Inc. for event-based prediction markets in the US [6] - The strategic rollout of these partnerships has led to significant stock price increases, such as a nearly 490% spike in ROLR stock [7]

Core Insights - High Roller Technologies (ROLR) shares surged approximately 440% on January 14 following a partnership with Crypto.com to launch event-based prediction markets [1] - The partnership positions ROLR as an exclusive distribution channel for prediction market contracts in sports, entertainment, and finance, with a targeted launch in Q1 through HighRoller.com [1] Company Overview - ROLR stock is currently trading at nearly 12 times its price from mid-December, indicating significant investor interest [2] - The prediction market opportunity is expected to drive substantial long-term growth for ROLR, with annual trading volume in U.S. prediction markets projected to reach $1 trillion by the end of the decade, up from $10 billion in 2025 [3] Market Dynamics - Regulatory clarity under new CFTC leadership has transformed prediction markets from speculative entertainment into a professional trading infrastructure, enhancing ROLR's position in this emerging asset class [4] - The partnership with Crypto.com is seen as a strategic move to capture early market share, potentially rivaling traditional derivatives in liquidity and institutional adoption [4] Investment Considerations - Despite the promising prediction market opportunity, the current market price may have already factored in this potential, making ROLR a speculative investment at present levels [5] - ROLR is classified as a penny stock, which may expose it to high volatility and speculative trading behaviors, raising concerns about the sustainability of its recent price surge [6] - There is a notable absence of Wall Street coverage for ROLR shares, which could be a red flag for potential investors [8]

Core Viewpoint - High Roller Technologies (ROLR) experienced a 6x increase in its stock price following the announcement of a partnership with Crypto.com to launch event-based prediction markets in the US, indicating strong investor interest in the potential of prediction markets by 2026 [1] Company Summary - High Roller Technologies (ROLR) is an iGaming operator that has recently seen significant stock price appreciation due to its strategic partnership [1] - The collaboration with Crypto.com aims to tap into the growing market for event-based prediction, which is viewed as having substantial upside potential [1] Industry Summary - Prediction markets are emerging as a lucrative opportunity within the iGaming sector, with expectations of considerable growth by 2026 [1] - The partnership between ROLR and Crypto.com highlights the increasing convergence of cryptocurrency and gaming industries, suggesting a trend towards innovative betting solutions [1]

Core Insights - Bragg Gaming Group has announced a strategic partnership with Golden Whale Productions, a leader in iGaming data science, to enhance its operational capabilities through artificial intelligence [1] Group 1: Partnership Details - The collaboration aims to support Bragg's strategic objectives of utilizing AI to drive cost efficiencies and improve operational excellence [1] - This partnership is considered a major milestone for the company in its efforts to leverage advanced data science in the iGaming sector [1]