DDI - Earnings call transcript Q1 2024 | DoubleDown Interactive Co., Ltd.

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Operator

Good afternoon, and welcome to DoubleDown Interactive's Earnings Conference Call for the First Quarter ended March 31, 2024.

My name is Briana, and I will be your operator this afternoon. Prior to this call, DoubleDown issued its financial results for the first quarter of 2024 in the press release, a copy of which has been furnished in a report on Form 6-K filed with the SEC and is available in the Investor Relations section of the company's website at www.doubledowninteractive.com.

You can find the link to the Investor Relations section at the top of the homepage.

Joining us on today's call are DoubleDown CEO, Mr. CFO, and Kim; Keuk Mr. In Joe Sigrist.

remarks, for call the open the will questions. Following we

begins we will Before everyone formal of Section their management remarks, Securities the of within meaning Act management's XXA statements of that need the comments forward-looking today be XXXX. the of some remind to

of harbor the Litigation As company protection the hereby of Act provisions the XXXX Securities Securities XXXX. safe Private of and Act amended XXE as of Reform claims of Exchange Section amended, the the and

are historical be statements words present the include should, will, future expectations and and or continue, Forward-looking estimate, might, of anticipate, statements events facts expect, other about projections, use intend, terms. assume, such may, not identified or as can believe, and by similar

and company's not regarding and strategies, are and acquisition financial those to, future and mergers include financial expected the strategic limited outlook. Forward-looking objectives, performance plans, statements

Form future the to DoubleDown's financial should relying actual We Forward-looking and adversely for filed statements discussion report the could that detailed on are a cause on what expects. could SEC March subject XX-F uncertainties and and to to differ interpreting and materially and refer caution in risks company Therefore, results them. numerous you on from more with exercise the filings that risks of operating XX, XXXX, results annual impact SEC other condition. you

required the disclaims whether this call. otherwise, of of statements, as by not expressly result information, as The date the and to any obligations events These new of forward-looking update only law. or a are statements does undertake or except as made future forward-looking company alter

financial the in measures with the management non-GAAP Form isolation comparable be earnings measures, SEC most superior should A with company's available full as to for to on X-K will operating results release management be are which call, the These and substitute DoubleDown's to discuss measure accordance believed prepared GAAP call. this of the these a the or directly considered measures filled in in reconciliation not performance. prior is to by evaluating useful GAAP. the During in

I available DoubleDown's call over a pleasure for this that Keuk It's would Investor of the to Kim. section now being In be via made will turn link my to DoubleDown's like to recorded in Relations remind website. and the everyone replay is CEO, call

In Keuk Kim

you adjusted from Thank was you, first SuprNation, everyone. compared announced Today, with Briana. social and our million. we games QX to cash basis flow and on Earnings was us for million $XX of our an flow recent our by free-to-play And total our to excellent games we revenue Good job profit sequential year-over-year to $XX.X Quarter the operations $XX.X QX afternoon, XXXX operations revenue joining quarter and X% a from from Thank up cash casino and First casino on rising XX% for million continue free-to-play quarterly do converting XXXX. million iGaming coming QX that at X% acquisition. in with the to generated $X.X social $XX.X up EBITDA million Call. revenue

strong monetization Casino value important the great with revenue that recognize DoubleDown experience are average to monthly including per as More DDC, payer be increases we paying compelling and KPIs, rate. payer we specifically, game, players our some we continues casino continue offer. conversion our as growing core they Our most entertainment our and or year-over-year our to driver in social of of results the generated

to fun add DDC, engagement retention, higher within new last believe quarter's meta These benefits of features we We believe and player I are leading DoubleDown the as thereby growth and playing Orbs we during Power, from the the introduction to reflects which our Lucky features of and such call, revenue Casino. Flame monetization. overall seeing driving mentioned

we plan which weekly quarter, second play. offers monthly players games alongside addition, to this and their In daily, launch casino quests [indiscernible], during

continue Our cash in disciplined flow. in while of value spending entertainment user remaining free social acquisition strong DDC to enhancing to the casino and drive is profitability strategy and R&D

SuprNation. first this to of QX full quarter business. of operation represented Turning our iGaming

at Our stage to early and contribution were SuprNation's business, with so the the we results with this QX focus is scale revenue $X.X million. of far pleased

an iGaming continued are a in such plans initial opportunity to improvement. business goal to for diversify our is represents sector have our we with The addressable into The up pleased market new opportunities. an SuprNation and exciting highly for categories start to DoubleDown, growth strong very acquisition be just gaming that step

expand we continue financial excellent M&A. through to markets, Given both to ways these evaluate foundation, into our organically and

As the years. we we over we on exhibited will this strategy, the discipline apply have capital execute same

As on launch our call, I first gaming the first of highlighted in game an example, quarter our skill-based category. the

user ramping QX, our not proceed and meet acquisition decided forward. going investments performance after up However, have marketing higher requirements, players such, additional to not to in did activities metrics its we with as

new internally is in to including launches we expect our We XXXX, ensure launch when -- are new undertake mobile in quickly invest deploying to we developed that case, are If continuing have we that be for these game a on. to hurdles. principle to games, but in we those demonstrated proves that our additional move we value sale the will capital manner creates not and expertise overriding

us closing turn to my will providing to Sigrist, our financials Joe? Joe walk remarks. our for over it through Now CFO, I

Joseph A. Sigrist

you, and Thank good Ik, afternoon, everyone.

QX the $XX.X social revenues million Our from revenues of company casino were of and million, first This million of million SuprNation. $X.X quarter from of compares total comprised revenues for $XX.X our in in XXXX XXXX. games to free-to-play revenues $XX.X

of social quarter quarter fourth and XXXX mentioned, was the casino of from the sequentially X% first up in X% year-over-year. IK XXXX free-to-play As revenue

percentage app increased The reflect for acquisition and basis. quarter, the the again consolidation quarter in for of is a gaming of casino the from the of comprised $X.XX the ARPDAU, first-time to and skill-based as million, our XXXX. XX% increase. acquiring $XX.X per of within sequential in increase on compared first ratio, sales million XXXX, $XXX XXXX X.X% of metrics fourth marketing into for improved QX was our XXXX. nearly were quarter as $XX.X casino return noted inclusion QX directed at XXXX marketing and XXXX to increased sequential compared XXXX period, OpEx social the best well earlier. on SuprNation's the apps full QX or was of those to quarter XX% inclusion of up primarily X% of of quarter both quarterly including $X.XX players was first QX of as focus of business KPI its spending Sales financial on from to first players the players decline $XX.X year-ago several costs operating expenses XXXX XX% the conversion to of increased this marketing to the continue quarter daily the in of $XXX social the increase The marking to In user, this and of $XX.X results on the million XXXX full a in revenue in and IK SuprNation QX and to monthly investment. pay who deliver expenses casino active compared Payer due to of average DoubleDown. Sales first QX ensure in social which sequential to X.X% the expenses new million year-over-year compared quarterly expenses basis per average QX at XXXX and first we revenue payer a in rose quarter Operating in in a

close stay expenses For relatively the and the sales to or next level. QX marketing several quarters, company for we anticipate will that below the overall

to $XX.XX $X.XX or $XX.X prior net the $XX.X to of respectively, diluted million income $X.XX $XX.X of diluted quarter. Net of XXXX. per and first and a XX.X% the EBITDA the to for per rise $X.XX quarter XXXX million increased ADS, to Adjusted in per the million and XX.X%, of quarter per XX.X% XXXX first income share was million share for the $XX.X XX% quarter ADS year or for of first compared compared

from XXXX, to quarter XX.X% period. for margin from compared $XX.X XXXX. of for cash in operations QX Net million were cash first prior QX representing the operations was net of from the year an million XXXX improvement in XX.X% EBITDA flow $XX.X Adjusted flows

Finally, sheet. turning to our balance

cash XX, end approximately shareholder a $X.XX of with net $XXX our per quarter position cash, or million outstanding XXXX, excluding ADS, controlling short-term $XXX DoubleU of at and approximately investments we cash had with As million loans in March Games. equivalents the

completes my summary. That financial

the over Now I'll remarks. turn call to for IK closing

In Keuk Kim

to strong XXXX, results our QX We life see continue development, the of and also Thank performance new will with social improving double-down delivers our this you, began of casino excellent and expand our a capital-efficient casino core financial to iGaming engagement as further cash business, way initiatives an we flow. core monetization through and marketing momentum demonstrating business. and enhancing We business high our social efforts. company and that casino In driving the ongoing Joe. product start continue in ability to operating

mentioned we increasing last during our focused volume. margins also direct-to-consumer quarter's call, are by on our we strong enhancing already As payment

M&A for through the of growth While and near and we business, the to are at invest as In opportunities. that in continued both expand continue the in adjacent look beginning options through player term, to players this it both to will is purchase pursue base to Sweden. Casino. to focus We organic is with to and this continue participation DoubleDown positive holidays initiative, effort gaming impact SuprNation, evaluate have to of forward we grow chips to the the U.K. we scale our efforts categories our

happy take to We're Briana? now your questions.

Operator

Our Lee Aaron Instructions] first from question of [Operator comes Macquarie.

Aaron Lee

the quarter. on Congrats

get there's in sequentially of XQ about be for, do expectations? first, to like to in get XQ? we you the some it and quarter sounds should I seasonality So And as wanted secondly, above. how believe to the to expect summer color momentum we I build sense thinking relative on year? SuprNation came But there. go balance some how a through It the business the more your performed

Joseph A. Sigrist

Aaron. Yes. questions. Appreciate Thanks, the

regard quarter ours business part are having end been very with to the QX SuprNation, of of we pleased to the of of the first first after the feel guess, the like X has positive. So We with I results. now, performance their as quarters

As mentioned, and we players fairly focus to then has user ability been the acquisition acquire initially turn activity. pleased into And new scaling we revenue quick meaningful been them see to on contributors. the have

see with out, to mean ultimately, from will, see And -- very marketing have it that rest plays the into said, if of see As quick it if this. of depositing we as revenue. to start had how pleased relates I year, you playing, we we're conversion, to the investment we'll but continue can we'll and the I

Aaron Lee

expenses for And think we a about results, should R&D the quick your G&A? quarter SuprNation of level With how structure? to run then good Understood. item. forward XQ your it. full housekeeping just cost this like OpEx first being a Got Is and within

Joseph A. Sigrist

Yes. By to the is and to marketing the mean, large, is side. on in only I categories, I quarter of And kind included full expense everything QX. going relative think the variability be

be that I of mentioned, much basis, hold where true. we skill-based or the in because that, primarily marketing where players. on we think first been likely As fact to at investing we acquire QX will below in rates the a of longer quarterly I or game, year any other for than the won't rest were pretty the new run be But our will have

Operator

from Gibas Our Securities. Greg comes of next question Northland

Gregory Gibas

whole. the core to like it's to for follow joe, been business I up challenging social and IK wanted the a considering up see that just year-over-year congrats on on casino Nice SuprNation. as results.

what of curious kind think if drove discuss maybe Just could that. you you

Joseph A. Sigrist

Yes.

to I think play. the results able differentiation know business. And leads ultimately, as within and quarter, relative monetization. last we being the that to pleased a then also our with and It's to continue we core about pretty product which players product lot were into to incent mentioned we

that want us last we but that least the they ongoing we to slot at we development at to play the the features DoubleDown also fun play good excited the they have developing fun, games, and and when additional will, on, individual continuing that's why and to really and to IK additional top people fun. them journeys if of And And with so focus still have individual they in various span have fun meta we're play they new games into have And These you Casino. mean, -- and they and things that certainly, think a add DoubleDown individual been as end of individual people the our features. fun add I when on Casino. that have So return couple to mentioned to the play slots, the that day, of are pay. part on quarters, be of casino are of we continue over quests games

Gregory Gibas

out then kind pretty switching good expectations Wondering your That's strong about to is could have And SuprNation. performance from kind a quarter if there? seasonality of My just understanding of rough if them. And Cool. you your of compared talk could if maybe results you year do over to kind business? hear. you to ago and core Great. that And with of how differs it discuss just them?

Joseph A. Sigrist

focused reported why results product for marketing the it's Yes. we their to the business. and working learning to And part also as being with on those. that I very but that on business differentiation do in strong and we're the been of we want that have they side well. days continue business I contributed that's And their early iGaming has with initiatives on today know their SuprNation also mean business, the us. we they're we mean

described I more we've not on fun-oriented hardcore their kind is, in but is and the So player gambler just iGaming the also past, on of focus entertainment-oriented think, the important.

friends on a all winning the but So quite competitions brand. group folks which product or which to and the main gambler, be differentiation they to other out have also their to the really the going relative Duelz obviously playing also want against called their strategy, so-called of an win with be to It's to who well working strategy I seems important part their money, players. focus of not who as fun, committed to Duelz, allows just, players have, competing of said, their attempting part brand but it's also are

Gregory Gibas

you Interesting. reputed buybacks wanted of better your just get of one, just last there. are kind thoughts wanted uses Got thoughts going it. updated seeing I cash? guess to to get Would I on forward. --

Joseph A. Sigrist

described our look controlling strong use we we've available we to done at we best balance with our look in absolutely market the toward believe sheet for opportunities, to at have of in is cash, that future, Board, help SuprNation our again, shareholder, and as the the business. acquisition, absolutely, that cash, what have the foreseeable we -- least past, allow grow and continuing M&A doing activity, and Well, companies actions filters us and take see the the we potential or are are the -- our to things our a screens and us businesses

Operator

This for conference. This session. Instructions] you today's your the conclude participation now Thank question-and-answer you. in [Operator concludes program. does the Thank

You disconnect. may now

DoubleDown Interactive (DDI) 8 May 242024 Q1 Earnings call transcript