DDI - Earnings call transcript Q2 2024 | DoubleDown Interactive Co., Ltd.

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Operator

Good afternoon, and welcome to DoubleDown Interactive Earnings Conference Call for the Second Quarter Ending in June 30, 2024. My name is Lisa, and I will be your operator for this afternoon.

Prior to this call, DoubleDown issued its financial results for the second quarter of 2024 in a 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.doubledowinteractive.com.

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

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

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

Before the need to XXXX as management's formal XXA of remarks, that of Act the their be of of Reform of Securities within amended XXE Securities will comments management some the amended of of and harbor the as claims today safe company Section statements meaning Litigation the hereby the Exchange remind begins and Private provisions XXXX. of Section Act the everyone Act protection forward-looking Securities we of XXXX

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

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

numerous that Forward-looking the subject and materially you expects. adversely this. from interpreting relying can to results on should statements differ Therefore, and to cause company caution what actual in and are risks exercise uncertainties

you report XX-F with and could impact on SEC, and conditions. DoubleDown's company results filed financial detailed XXXX, to for other March the Form XX, a filings risks that The the SEC more refers of annual discussion future operating

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

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

to Relations is will like remind DoubleDown's Investor for be link the section would I that recorded this replay of being via made in website. and everyone a available call

pleasure call over to begin. It's turn Kim, In to you my Keuk now CEO, the DoubleDown may

In Keuk Kim

Lisa. growth you, us consecutive This for social as to million Thank call. up SuprNation, iGaming second year-over-year of casino/free-to-play our afternoon, earnings games QX generated afternoon, revenue our generated social quarter our the everyone. we and revenue by million total for reported Good million Thank $XX.X casino our free-to-play XXXX. joining third X% $X.X you QX quarter business of of QX on $XX.X by comprised compared business. was was it XXXX

as recently outperform for the casino industry social Our share ability to Eilers large. reflects growth reported revenue casino and year-over-year gain social estimated top segment & overall the Krejcik an Gaming market our line decline at

our being converting growth Importantly, to consistently of our criteria profit within line achieved flow. and cash top is revenue

quarter from $XX was XX% and million second to the cash for $XX.X flow EBITDA Adjusted operations rose million. year-over-year

in driver revenue year-over-year payer payer and our the be per average including as our a strong rate. to continues of Casino monthly results some ARPDAU, again DoubleDown increase generated conversion important KPIs, we most of

more features meta payer excitement to focus and player our Casino. DoubleDown recent As we previously business deliver last features even These growth due players. in we is DoubleDown the as are we discussed, part release have continue for with year's to Casino consistent our casino believe of new to social retention of on

while greater from options from to remaining to our enhancing profitability continue the ramp spend cash casino DoubleDown user Casino and social initiative benefit to drive for acquisition are the profitability direct quarter, players free the which value strategy disciplined In flow. strong social our Revenues efforts, chips noticeably. In to and beginning business channels. casino in to provide also is our our second benefited of these from summary, buy with R&D entertainment

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spending In QX, somewhat player compared back on pulled we QX. acquisition to

the gained and fine-tune with plans are our to SuprNation. more we efforts we've scale experience to, beginning As business,

opportunities And growth strengths, our many over sweet developers' optimize both and and core including this game find line generation. the scale expect in we to quarters, top cash SuprNation platform next several to leverage our profitably. to the game flow creation business continue we believe business, In we investment expertise spot have in marketing our to the to

The only we are our addressable our sheet business confirms we having into and leverage SuprNation core progress new thesis with categories our that opportunity. to can balance diversify further have highly that a market strengths gaming

internally new manner creates launch games, including to of to a in invest those the that half we expect to the second year in value with for shareholders. these this continuing mobile in are efforts developed additional commitment We undertake

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

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

Joseph A. Sigrist

afternoon, everyone. and Thank good you, IK,

casino/free-to-play million total revenues XXXX million were our to revenues Our games were of comprised casino/free-to-play $XX.X compares $X.X $XX.X of in SuprNation. and million year. revenues from $XX.X the from our second of for This social million revenues games last social from quarter and of

As revenue decline. line a published QX casino/free-to-play top social year-over-year is mentioned, social up industry casino Eilers recently of X% was to year-over-year, QX which IK in estimate contrast

environment casino marking period, XXXX a several react second overall to as business QX goal to social $X.XX compared or in and changes again XX% daily in revenue from improved the outperform sentiment. increase. the $X.XX increased average continue our ARPDAU the to to user ago social we per XXXX active overall casino Going In year macroeconomic including market in monitor KPI forward, the consumer for is and metrics our quarter, to QX

is to XXXX, in XXXX compared revenue from X.X% ratio, social conversion increased XX% Payer average increased who QX monthly players QX which pay of XXXX environment, $XXX in $XXX QX to the per to XXXX. in QX in app within percentage the casino payer X.X% and

QX last Operating associated for expenses were million operation by which development million of and own compared the our to second which offset operations. quarter we sales marketing year-over-year $XX.X not lower and Operating to include a basis quarter did $XX.X on rose the and research in expenses of expenses XXXX. in second and casino XXXX SuprNation, partially social year for the expenses operating with our of

the XXXX down $XX.X QX were decline XX% a of of marketing basis. expenses quarterly XX% compared for second a million, and to on quarter sequential Sales XXXX and

to profitability top flow. In same line ramping QX, of and generate time at this to business to the fine-tune began while approach SuprNation cash we foundation to consistent establish managing the our the

acquiring sales continue on focused on new casino cost we reflect spending marketing the social on best to this Our our return focus and ensure investment. players deliver to

anticipate QX, be line will levels. we that expenses and overall marketing sales For in QX with

XXXX net XXX $X.XX and of ADS quarter or share second income per per Net million was the of per of to income XXXX. Adjusted second improvement prior for margin year and QX for XX.X% diluted second XX% point a share was $XX.X XXXX. of diluted compared $X.XX quarter. XXXX of the in the million $XX.X compared $X.XX EBITDA in XX.X% per for for increased million $XX.XX ADS Adjusted representing or XXXX, the quarter basis to QX to million EBITDA $XX.X from quarter $XX.X

in million were compared $XX.X second for XXXX. the provided operating the of Net second to activities activities cash flows cash XXXX quarter by operating $XX.X flows of million used quarter in of net

due increase occurred the last of tax litigation $XX.XX The well million towards the asset income Benson second in of settlement higher is the quarter as year. final as deferred to net and that lower primarily a payment impact

sheet. finally, to And our turning balance

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

from loan years of the approximately X.X% loans. financial controlling we summary. completes in $XX an the my we decision million extend X off had interest we for intended pay to at original previously made indicated shareholder same loan That instead While of that our rate this to additional amounts the May,

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

In Keuk Kim

casino Thank momentum. performance you, Joe. and the in SuprNation social solid The continued operating business iGaming performance strong our of core our QX our results extended business

introduction Over the focused through deliver further ability balance content, expertise. real-time will our slot live our through on and to remain new improvement of of DoubleDown our this driving ROI-based players spend in continued marketing the to value year, Casino we

discipline. a to to drive be is is player with consistent will continue in capital monetization strategy engagement our efficiency Our and manner that undertaken higher

options increase players to efforts an DoubleDown our purchase to have volumes chips. number expect expanded consumer we addition, whereby In of direct Casino payment

forward. app the to going stores, continue Beyond margins we'll our strong benefit already

long have gain base As consistent the to term. contributions we discussed Sweden can and we and strategies additional both deliver expect today, fine-tuning with this player focusing player experience the in business, our the foundation in near that for on U.K. our also grow setting while SuprNation the more on new so progress to we we positive business make as flow position operational cash

to us adjacent free highlight efforts pursue to strong development that with by gaming categories through in-house will and and I attractive opportunities provides flow in we generate sheet consistency flexibility cash which with our Finally, opportunities. continue potential exploring the growth balance M&A financial through our

questions. happy to Lisa? are your now take We

Operator

for B. Instructions] will from [Operator David Bain today Riley. Our first be coming of question

David Bain

was points of do know we term EBITDA through to be really about a basis think the want First, went My but anticipated. near better several long really obviously, and this, margins. first I on forward. acknowledge done. an would that lot XQ than go excellent hundred you had well execution, to question trying I I'm on

and marketing into downtick maintained likely sales are You mentioned the in XQ.

I revenue in revenue, compare percentage sustain DXC beyond any be positive you a way to XQ as transactions IK that's helpful. XQ, So a anything in can if there's percentage that it having level Frame Maybe were, then and DXC impact more XQ. in quarter-over-quarter? one, really likely it of can, a would if what it mentioned mean, of you

Joseph A. Sigrist

comments the and Appreciate Sure. the questions.

always spend been As quarters, we you And social something of very, in have as mindful know. especially that recently, I margins, more far as the that is it's the by had over certain the because in extent, recent on now more especially we've couple think you sales and XX%, with ROI a focused to mentioned, EBITDA business. been efficiency of as associated but very casino shown, very being we've driven a marketing

launch to as up ended as in with we new basis, from QX. developed spend be in will mentioned, year. an where from we are I IK believe, on looking end-of-the-year the consistent do marketing -- mentioned, And absolute a standpoint, QX dollars that I an organically later game pretty

And from the in on QX in marketing look might end much towards create QX of year. spend pretty QX think uptick amount a so perspective, the But and we that an -- the same. of absolute the

this as the last As over us. direct-to-consumer, just said it far think, I is couple of two, really And days it it's we focus focus. a made -- in things, consistently XXXX. We early as for well year said in started that a One, pretty we've of with And as with X quarters. quarters. in last in we have good progress couple big of mind, ours

to more it frankly, of look even has have made of an year certainly is still quantify yet can't I but it and early XXXX. the because, it rest the and be into over impact days, impactful somewhat it you certainly for

David Bain

social taking my particular offer an in Okay. slightly mentioned they around you Awesome. industry casino. down. of relates you sweepstakes I specifics be, And casino industry that to publication share seeing? are follow-up reason you any guys industry. or the was And that's big the cited then relative the know concept the Can as you're calling And picture would to one maybe industry it from any social gaining that

Joseph A. Sigrist

happy DoubleDown as see It's our a we're with Casino with peers investment as And happening we very where comment obviously now. IK a in right our on in done little difficult for the we've is to what's and our more is especially because DoubleDown meta makes on to than features what's what players. to business, our to mentioned, play been. in and going lot, us is then very, new where even players payers it an they of environment want And has that, we the continuing and pay think, bring all ever entertaining our Casino have content and want created to great

market. casino to what the and So continuing around can't be us be I on social our business very running on comment because might happening within successful we're focused

Operator

And question Greg today Securities. Gibas be our next of will Northland coming from

Gregory Gibas

ahead the what If estimated appreciate the in rate maybe noted expectations, of of on that believe on last dynamics Congrats could, maybe the is results. driving everything with forward? is couple what attribute do maybe have your nice And upside and you been SuprNation? color what the run quarters You you I there. terms to? cost I expectations fair would of going the

Joseph A. Sigrist

the Thanks, and spending I still helped. the that just being started be we we And into there And full was the past, ops are markets, from we've them in development, new marketing platform legacy. mean, then as money marketing their about we business, and do on new marketing that incremental we the believe we social social that we the operating our positive business, our again, which from think the live announced invest which excited and expect Greg. standpoint, in seen main the business bought a technology that business. at to game players. definitely partners different we've players. continue and additional we're that to more Yes, to spend. And lean much But learn to we iGaming that business well are more their spend, different talked are acquire our is have quarter operating and than when the X the work been U.K., really casino us I about with has as SuprNation, far can realized you ROI top to things we this Sweden since investment ramp synergies quarter certainly with opportunity KPIs casino get things in that acquire much Obviously, and dynamics second in and that very as our layer

Gregory Gibas

casino, the And helpful. considering there games nice social see follow I if of aforementioned the just could That's sweepstakes maybe pressuring and within kind growth Great. to up, peers. especially some

that terms of driving And consumer strong up you've meta follow features what's You the think to response? you I and kind of showing are kind of in note what's of kind just see the wanted well growth there. and what working implemented

In Keuk Kim

Greg, this Yes. IK. is

-- has casino lots been pioneers ] and content actually through of Let We meta in space the social XX the providing slot for players me start of with years. first content. focused one DDC elements our [ on over fun

and recent very those introduced became the we complicated. years, and as benefits features However, more for users in flow content economy

[indiscernible] and reformed last [ from many So experience started ] perspective. year, features to user flaws we a

your Those At the same features time, features it enabled us to quarter. provide attractive Cards, are we retention meta like meta as et features. Wonder last Power, Flame cetera, real described

So could slot help play users as simply playing more, those retention. users

fun on. to Welcome continue Pass, features will Mission experiment so Windfall like We with Back and retention

hope I this So helps.

Gregory Gibas

seeing Great. to does. you're success Yes, it good with hear them. And that

Operator

Lee next our [Operator Instructions] And coming of from day will for question the Aaron be Macquarie.

Aaron Lee

the on Congrats quarter.

It's sheet. your net you still shape, million. about in $XXX talked of cash balance So great

you for into M&A? it the do evaluating Where adjacency? you diversifying M&A. most see about iGaming social another Casino, Is within within on or talked You focused remain opportunity

Joseph A. Sigrist

kidding. Yes. just No, I'm

which match continue X categories the categories, a are to oriented are we and that across gaming I categories more categories categories large still and at which some power of payer playing have more, ], but them guess, look incredible other those from [ I'd the have perspective. obviously in still been past And categories. very We in non-casino mobile there certainly, call puzzle, opportunities

announced it, an excited turning haven't but buying we So company. And with for into list. game we that which the what SuprNation, about meet an other certainly kind areas Obviously, anything of about were number iGaming, standpoint. at just aren't a we looking aren't are also when ourselves iGaming said we're were a crossed we're that is our that of factors what look solely really to consistent we but criteria, off we that willing efficiency from

Aaron Lee

great it. to That's Got hear.

on real-world some content, know follow-up. the can a to any to comment you. at business? As year. whether which you a of that have your end you large you by use expect quick IGT's live of see insulate their all? announced the impact IGT with agreement recently license would a content, an But on exclusive that A for competitor which go having I they of portion And licensing

Joseph A. Sigrist

with doesn't been business announcement. all. our affect been at category familiar in what I'm they've the with IGT years. in is looking doing. for familiar We're the partners has casino Yes. fact, to it answer license partner social And for several additional short our the And

-- exclusive games the the Greg, mentioned, rightfully use, perpetual have and of games you to. we license that perpetual most license As we

use XXXX, Golden game of frankly, we we those exclusive said IGT the offer our players that Goddesses to And the perpetual license use. from we are players. as and have license fact, have best games and but in to that of don't some a we to of a IGT our games after Diamonds. that our Cleopatras Da And any we filings, kind exclusive do perpetual 'XX, love, started Vinci games that, We taken still have to prior to. we too, In have all license started to new

really I I over shareholder, finally many times guess content we've content the well pivoted licensed -- we've as towards past, DoubleU. from developed in ourselves as discussed we've as I'd that say our internally controlling few that last the more we've years, think that

quite taken we has that as of IGT So And amount about new of more adds content bit. from what lack the IGT to a consequence, concern that doing fallen the been has a we've certainly have recently.

Operator

session. conference today's concludes also today's this does Q&A you. It And call. Thank conclude

You may so for thank disconnect, you joining. much and all

In Keuk Kim

Lisa. Thanks, everyone. you, Thank

DoubleDown Interactive (DDI) 12 Aug 242024 Q2 Earnings call transcript