DoubleDown Interactive Co., Ltd. (NASDAQ: DDI) (“DoubleDown” or the
“Company”), a leading developer and publisher of digital games on
mobile and web-based platforms, today announced its unaudited
financial results for the first quarter ended March 31, 2024. The
Company’s consolidated financial results for the three-month period
ended March 31, 2024 include the unaudited financial results of
SuprNation AB, a European iGaming operator (“SuprNation”), which
was acquired by the Company on October 31, 2023.
First Quarter 2024 vs. First Quarter
2023 Summary:
- Revenue increased to $88.1 million
in the first quarter of 2024 from $77.6 million in the first
quarter of 2023. Revenue contributed by SuprNation totaled $8.3
million in the first quarter of 2024. Revenue exclusive of the
contributions from SuprNation increased to $79.8 million,
representing a 3% year over year growth.
- Operating expenses increased to
$57.1 million in the first quarter of 2024 from $52.2 million in
the first quarter of 2023, primarily due to the inclusion of
expenses related to SuprNation operations in the first quarter of
2024, partially offset by lower sales and marketing and research
and development expenses.
- Net income increased to $30.4
million, or earnings per fully diluted common share of $12.23
($0.61 per American Depositary Share (“ADS”)), in the first quarter
of 2024, from $23.7 million, or earnings of $9.55 per fully diluted
common share ($0.48 per ADS), in the first quarter of 2023. Note
each ADS represents 0.05 share of a common share.
- Adjusted EBITDA increased to $31.9
million for the first quarter of 2024 from $25.4 million in the
first quarter of 2023, primarily due to higher revenue and lower
overall sales and marketing and research and development expenses,
partially offset by higher general and administrative expenses.
Adjusted EBITDA margin increased to 36.2% in the first quarter of
2024 from 32.8% in the first quarter of 2023.
- Average Revenue Per Daily Active
User (“ARPDAU”) for the Company’s social casino/free-to-play games
increased to $1.26 in the first quarter of 2024 from $1.03 in the
first quarter of 2023 and from $1.24 in the fourth quarter of
2023.
- Average monthly revenue per payer
for the social casino/free-to-play games increased to $281 in the
first quarter of 2024 from $221 in the first quarter of 2023 and
from $279 in the fourth quarter of 2023.
“The first quarter of 2024 marked another
quarter of strong financial results, with consolidated revenue of
$88.1 million and Adjusted EBITDA of $31.9 million, representing
14% and 26% year-over-year growth, respectively. Revenue from our
social casino games increased 3% year-over-year for the second
consecutive quarter,” said In Keuk Kim, Chief Executive Officer of
DoubleDown. “Our DoubleDown Casino’s performance is benefitting
from the recently introduced meta features that are further
advancing our ability to improve monetization and generate strong
engagement metrics, with ARPDAU rising on a quarterly sequential
basis and by 22% year over year, and average revenue per payer also
rising from 2023 fourth quarter levels and growing 27% year over
year. The strong performance of our social casino business combined
with our commitment to remain disciplined with user acquisition and
R&D spend delivered another quarter of strong Adjusted EBITDA
margin and free cash flow, with cash flow from operating activities
of $34.9 million in the 2024 first quarter.
“The first quarter represented our first full
quarter of operations of SuprNation, a European iGaming operator,
which is off to a strong start as we begin to implement our
initiatives to grow the business by leveraging our marketing and
player engagement and monetization strategies and expertise. We
intend to continue to focus on driving revenue growth for
SuprNation for the next several quarters.
“We believe our consistently strong Adjusted
EBITDA margins and free cash flow generation again highlights our
commitment and success in prioritizing capital efficiency. We ended
the first quarter with an aggregate of cash and cash equivalents
and short-term investments, net of current borrowing, of
approximately $272 million, or approximately $5.50 per ADS. Our
operating strategies that drive strong free cash flow, combined
with our balance sheet, provides the Company with significant
financial flexibility to evaluate opportunities to deploy capital
to pursue both organic and accretive acquisition-related growth in
related gaming categories to generate attractive profitable growth
and additional cash flow thereby creating new value for our
shareholders.”
Summary Operating Results for DoubleDown Interactive
(Unaudited)
|
Three months ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
Revenue ($ MM) |
$ |
88.1 |
|
|
$ |
77.6 |
|
Total operating expenses ($
MM) |
|
57.1 |
|
|
|
52.2 |
|
Net income ($ MM) |
$ |
30.4 |
|
|
$ |
23.7 |
|
Adjusted EBITDA ($ MM) |
$ |
31.9 |
|
|
$ |
25.4 |
|
Net income margin |
|
34.4 |
% |
|
|
30.5 |
% |
Adjusted EBITDA margin |
|
36.2 |
% |
|
|
32.8 |
% |
|
|
|
|
Non-financial performance
metrics(1) |
|
|
|
Average monthly active users
(000s) |
|
1,478 |
|
|
|
2,032 |
|
Average daily active users
(000s) |
|
699 |
|
|
|
841 |
|
ARPDAU |
$ |
1.26 |
|
|
$ |
1.03 |
|
Average monthly revenue per
payer |
$ |
281 |
|
|
$ |
221 |
|
Payer conversion |
|
6.4 |
% |
|
|
5.8 |
% |
(1) Social casino/free-to-play
games only |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter 2024 Financial Results
Revenue inclusive of the contributions from
SuprNation (with a total revenue of $8.3 million) in the first
quarter of 2024 was $88.1 million, an increase of 13% from $77.6
million in the first quarter of 2023. Revenue exclusive of the
contributions from SuprNation increased 3% year over year to $79.8
million, which primarily reflects higher engagement of the existing
player base.
Operating expenses in the first quarter of 2024
were $57.1 million, a 9% increase from the first quarter of 2023.
The increase in operating expenses is primarily due to the
inclusion of SuprNation expenses in the first quarter of 2024,
which were not present in the first quarter of 2023.
The Company recorded net income of $30.4 million
in the first quarter of 2024, or $12.23 per fully diluted common
share ($0.61 per ADS), as compared to net income of $23.7 million,
or $9.55 per fully diluted common share ($0.48 per ADS), in the
first quarter of 2023. The increase in net income for the first
quarter of 2024 was primarily due to increased revenue and lower
sales and marketing and research and development expenditures,
despite the new expenses for SuprNation, partially offset by higher
general and administrative expenses. Note each ADS represents 0.05
share of a common share.
Adjusted EBITDA in the first quarter of 2024
increased 26%, or $6.5 million, to $31.9 million, compared to $25.4
million in the first quarter of 2023. The increase primarily
reflects higher revenue and lower sales and marketing and research
and development expenses, despite the new expenses for SuprNation,
partially offset by higher general and administrative expenses.
Net cash flows provided by operating activities
for the first quarter of 2024 was $34.9 million, compared to net
cash flows provided by operating activities of $19.2 million in the
first quarter of 2023. The increase is primarily due to increased
net income and decreased deferred tax asset.
Conference Call
DoubleDown will hold a conference call today
(May 8, 2024) at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to
discuss these results. A question-and-answer session will follow
management’s presentation.
To access the call, please use the following
link: DoubleDown First Quarter 2024 Earnings Call. After
registering, an email will be sent, including dial-in details and a
unique conference call access code required to join the live call.
To ensure you are connected prior to the beginning of the call,
please register a minimum of 15 minutes before the start of the
call.
A simultaneous webcast of the conference call
will be available with the following link: DoubleDown First Quarter
2024 Earnings Webcast, or via the Investor Relations page of the
DoubleDown website at ir.doubledowninteractive.com. For those not
planning to ask a question on the conference call, the Company
recommends listening via the webcast. A replay will be available on
the Company's Investor Relations website shortly after the
event.
About DoubleDown Interactive
DoubleDown Interactive Co., Ltd. is a leading developer and
publisher of digital games on mobile and web-based platforms. We
are the creators of multi-format interactive entertainment
experiences for casual players, bringing authentic Vegas
entertainment to players around the world through an online social
casino experience. The Company’s flagship social casino title,
DoubleDown Casino, has been a fan-favorite game on leading social
and mobile platforms for years, entertaining millions of players
worldwide with a lineup of classic and modern games. Following its
acquisition of SuprNation in October 2023, the Company also
operates three real-money iGaming sites in Western Europe.
Safe Harbor Statement
Certain statements contained in this press
release are “forward-looking statements” about future events and
expectations for purposes of the safe harbor provisions under the
United States Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on our beliefs, assumptions,
and expectations of industry trends, our future financial and
operating performance, and our growth plans, taking into account
the information currently available to us. These statements are not
statements of historical fact. We have based these forward-looking
statements on our current expectations and assumptions about future
events. While our management considers these expectations and
assumptions to be reasonable, they are inherently subject to
significant business, economic, competitive, regulatory and other
risks, contingencies and uncertainties, most of which are difficult
to predict and many of which are beyond our control. Therefore, you
should not place undue reliance on such statements. Words such as
“anticipates,” believes,” “continues,” “estimates,” “expects,”
“goal,” “objectives,” “intends,” “may,” “opportunity,” “plans,”
potential,” “near-term,” long-term,” “projections,” “assumptions,”
“projects,” “guidance,” “forecasts,” “outlook,” “target,” “trends,”
“should,” “could,” “would,” “will,” and similar expressions are
intended to identify such forward-looking statements. We qualify
any forward-looking statements entirely by these cautionary
factors. We assume no obligation to update or revise any
forward-looking statements for any reason or to update the reasons
actual results could differ materially from those anticipated in
these forward-looking statements, even if new information becomes
available in the future.
Use and Reconciliation of Non-GAAP
Financial Measures
In addition to our results determined in
accordance with the accounting principles generally accepted in the
United States of America (“GAAP”), we believe the following
non-GAAP financial measure is useful in evaluating our operating
performance. We present “adjusted earnings before interest, taxes,
depreciation and amortization” (“Adjusted EBITDA”) because we
believe it assists investors and analysts by facilitating
comparison of period-to-period operational performance on a
consistent basis by excluding items that we do not believe are
indicative of our core operating performance. The items excluded
from the Adjusted EBITDA may have a material impact on our
financial results. Certain of those items are non-recurring, while
others are non-cash in nature. Accordingly, the Adjusted EBITDA is
presented as supplemental disclosure and should not be considered
in isolation of, as a substitute for, or superior to, the financial
information prepared in accordance with GAAP, and should be read in
conjunction with the financial statements furnished in our report
on Form 6-K filed with the SEC.
In our reconciliation from our reported GAAP
“net income before provision for taxes” to our Adjusted EBITDA, we
eliminate the impact of the following six line items: (i)
depreciation and amortization; (ii) interest income; (iii) interest
expense; (iv) foreign currency transaction/remeasurement (gain)
loss; (v) short-term investments (gain) loss; and (vi) other
(income) expense, net. The below table sets forth the full
reconciliation of our non-GAAP measures:
Reconciliation of non-GAAP measures |
Three months ended March 31, |
(in millions, except percentages) |
|
2024 |
|
|
|
2023 |
|
Net income |
$ |
30.4 |
|
|
$ |
23.7 |
|
Income tax benefit
(expense) |
|
(8.0 |
) |
|
|
(6.8 |
) |
Income (loss) before tax |
|
38.4 |
|
|
|
30.4 |
|
|
|
|
|
|
|
|
|
Adjustments for: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
0.8 |
|
|
|
0.1 |
|
Interest income |
|
(3.4 |
) |
|
|
(3.1 |
) |
Interest expense |
|
0.4 |
|
|
|
0.5 |
|
Foreign currency transaction/remeasurement gain |
|
(4.3 |
) |
|
|
(2.4 |
) |
Short-term investments (gain) loss |
|
0.0 |
|
|
|
- |
|
Other (income) expense, net |
|
0.0 |
|
|
|
0.0 |
|
Adjusted EBITDA |
$ |
31.9 |
|
|
$ |
25.4 |
|
Adjusted EBITDA margin |
|
36.2 |
% |
|
|
32.8 |
% |
|
|
|
|
|
|
|
|
We encourage investors and others to review our
financial information in its entirety and not to rely on any single
financial measure.
Company Contact:Joe Sigristir@doubledown.com+1
(206) 773-2266Chief Financial
Officerhttps://www.doubledowninteractive.com
Investor Relations Contact:Joseph Jaffoni or
Richard LandJCIR+1 (212) 835-8500DDI@jcir.com
DoubleDown Interactive Co., Ltd.Condensed
Consolidated Balance Sheets(In thousands of U.S.
dollars, except share and per share amounts) |
|
|
March 31, |
|
December 31, |
|
|
2024 |
|
|
|
2023 |
|
Assets |
(unaudited) |
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
209,863 |
|
|
$ |
206,911 |
|
Short-term investments |
|
99,653 |
|
|
|
67,756 |
|
Accounts receivable, net |
|
34,183 |
|
|
|
32,517 |
|
Prepaid expenses, and other assets |
|
10,044 |
|
|
|
8,570 |
|
Total current assets |
$ |
353,743 |
|
|
$ |
315,754 |
|
Property and equipment, net |
|
399 |
|
|
|
444 |
|
Operating lease right-of-use assets, net |
|
6,173 |
|
|
|
7,130 |
|
Intangible assets, net |
|
50,430 |
|
|
|
51,571 |
|
Goodwill |
|
396,351 |
|
|
|
396,704 |
|
Deferred tax asset |
|
21,878 |
|
|
|
28,934 |
|
Other non-current assets |
|
2,006 |
|
|
|
2,807 |
|
Total assets |
$ |
830,890 |
|
|
$ |
803,344 |
|
|
|
|
Liabilities and Shareholders’
Equity |
|
|
Accounts payable and accrued expenses(1) |
$ |
14,464 |
|
|
$ |
13,293 |
|
Short-term operating lease liabilities(2) |
|
2,562 |
|
|
|
3,157 |
|
Income taxes payable |
|
1,170 |
|
|
|
112 |
|
Contract liabilities |
|
2,409 |
|
|
|
2,520 |
|
Current portion of borrowings with related party(3) |
|
37,125 |
|
|
|
38,778 |
|
Other current liabilities(4) |
|
10,624 |
|
|
|
10,645 |
|
Total current liabilities |
$ |
68,354 |
|
|
$ |
68,505 |
|
Long-term operating lease liabilities(5) |
|
3,975 |
|
|
|
4,420 |
|
Deferred tax liabilities, net |
|
567 |
|
|
|
848 |
|
Other non-current liabilities |
|
2,784 |
|
|
|
1,681 |
|
Total liabilities |
$ |
75,680 |
|
|
$ |
75,454 |
|
Shareholders’ equity |
|
|
Common stock, KRW 10,000 par value - 200,000,000 Shares authorized;
2,477,672 issued and outstanding |
|
21,198 |
|
|
|
21,198 |
|
Additional paid-in-capital |
|
359,280 |
|
|
|
359,280 |
|
Accumulated other comprehensive income |
|
17,095 |
|
|
|
19,982 |
|
Retained earnings |
|
357,580 |
|
|
|
327,273 |
|
Total shareholders’ equity
attributable to shareowners of DDI Co. Ltd. |
$ |
755,153 |
|
|
$ |
727,733 |
|
Equity attributable to noncontrolling interests |
|
147 |
|
|
|
157 |
|
Total equity |
$ |
755,300 |
|
|
$ |
727,890 |
|
Total liabilities and
shareholders’ equity |
$ |
830,980 |
|
|
$ |
803,344 |
|
|
|
|
(1) Includes
related party royalty and other payables of $1,274 and $1,618 at
March 31, 2024 and December 31, 2023, respectively (see Note 12 to
the unaudited consolidated financial statements of the Company for
the three months ended March 31, 2024). |
(2) Includes
related party operating lease liability of $1,251 and $1,298 at
March 31, 2024 and December 31, 2023, respectively (see Note 12 to
the unaudited consolidated financial statements of the Company for
the three months ended March 31, 2024). |
(3) Includes
related party notes payable of $37,125 and $38,778 at March 31,
2024 and December 31, 2023, respectively (see Note 12 to the
unaudited consolidated financial statements of the Company for the
three months ended March 31, 2024). |
(4) Includes
related party interest payable of $9,522 and $9,501 at March 31,
2024 and December 31, 2023, respectively (see Note 12 to the
unaudited consolidated financial statements of the Company for the
three months ended March 31, 2024). |
(5) Includes
related party operating lease liability of $3,975 and $4,414 at
March 31, 2024 and December 31, 2023, respectively (see Note 12 to
the unaudited consolidated financial statements of the Company for
the three months ended March 31, 2024). |
|
DoubleDown Interactive Co., Ltd.Condensed
Consolidated Statement of Income and Comprehensive
Income(Unaudited, in thousands except share and
per share amounts) |
|
|
Three months ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
Revenue |
$ |
88,143 |
|
|
$ |
77,596 |
|
Operating expenses: |
|
|
|
|
|
|
|
Cost of revenue(1)(2) |
|
27,373 |
|
|
|
25,719 |
|
Sales and marketing(1) |
|
14,760 |
|
|
|
16,045 |
|
Research and development(1) |
|
3,256 |
|
|
|
5,043 |
|
General and administrative(1)(3) |
|
10,871 |
|
|
|
5,343 |
|
Depreciation and amortization |
|
827 |
|
|
|
54 |
|
Total
operating expenses |
|
57,087 |
|
|
|
52,204 |
|
Operating income |
$ |
31,056 |
|
|
$ |
25,392 |
|
Other
income (expense): |
|
|
|
|
|
|
|
Interest expense(4) |
|
(409 |
) |
|
|
(462 |
) |
Interest income |
|
3,431 |
|
|
|
3,130 |
|
Gain on foreign currency transactions |
|
717 |
|
|
|
252 |
|
Gain on foreign currency remeasurement |
|
3,589 |
|
|
|
2,166 |
|
Gain (loss) on short-term investments |
|
(7 |
) |
|
|
- |
|
Other, net |
|
(24 |
) |
|
|
(47 |
) |
Total
other income (expense), net |
$ |
7,297 |
|
|
$ |
5,039 |
|
Income before income tax |
$ |
38,353 |
|
|
$ |
30,431 |
|
Income tax (expense) benefit |
|
(7,992 |
) |
|
|
(6,759 |
) |
Net
income |
$ |
30,361 |
|
|
$ |
23,672 |
|
Less: Net income attributable to noncontrolling interests |
|
53 |
|
|
|
- |
|
Net
income attributable to DoubleDown Interactive Co., Ltd. |
$ |
30,308 |
|
|
$ |
23,672 |
|
Other
comprehensive income (expense): |
|
|
|
|
|
|
|
Pension adjustments, net of tax |
|
136 |
|
|
|
(157 |
) |
Loss on foreign currency translation |
|
(3,086 |
) |
|
|
(1,181 |
) |
Comprehensive income |
$ |
27,358 |
|
|
$ |
22,334 |
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
Basic |
$ |
12.23 |
|
|
$ |
9.55 |
|
Diluted |
$ |
12.23 |
|
|
$ |
9.55 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
2,477,672 |
|
|
|
2,477,672 |
|
Diluted |
|
2,477,672 |
|
|
|
2,477,672 |
|
(1) Excluding
depreciation and amortization |
(2) Includes
related party royalty expense of $619 and $752 for the three months
ended March 31, 2024 and 2023, respectively (See Note 12 to the
unaudited consolidated financial statements of the Company for the
three months ended March 31, 2024). |
(3) Includes
related party rent and general and administrative expense of $1,459
and $414 for the three months ended March 31, 2024 and 2023,
respectively (See Note 12 to the unaudited consolidated financial
statements of the Company for the three months ended March 31,
2024). |
(4) Includes
related party interest expense of $432 and $445 for the three
months ended March 31, 2024 and 2023, respectively (See Note 12 to
the unaudited consolidated financial statements of the Company for
the three months ended March 31, 2024). |
|
DoubleDown Interactive Co., Ltd.Condensed
Consolidated Statement of Cash Flows(Unaudited, in
thousands of U.S. dollars) |
|
|
Three months ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
Cash flow from (used in)
operating activities: |
|
|
|
|
|
|
|
Net Income |
$ |
30,361 |
|
|
$ |
23,672 |
|
Adjustments to reconcile net
income to net cash from operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
827 |
|
|
|
55 |
|
(Gain)Loss on foreign currency remeasurement |
|
(3,589 |
) |
|
|
(2,166 |
) |
(Gain)Loss on short-term investments |
|
7 |
|
|
|
- |
|
Deferred taxes |
|
6,756 |
|
|
|
6,063 |
|
Working capital
adjustments: |
|
|
|
|
|
|
|
Accounts receivable |
|
(1,808 |
) |
|
|
(7,707 |
) |
Prepaid expenses, other current and non-current assets |
|
(269 |
) |
|
|
274 |
|
Accounts payable, accrued expenses and other payables |
|
1,291 |
|
|
|
(1,046 |
) |
Contract liabilities |
|
(112 |
) |
|
|
(208 |
) |
Income tax payable |
|
158 |
|
|
|
5 |
|
Other current and non-current liabilities |
|
1,293 |
|
|
|
284 |
|
Net cash flows from (used in)
operating activities |
$ |
34,915 |
|
|
$ |
19,226 |
|
Cash flow from (used in)
investing activities: |
|
|
|
|
|
|
|
Purchases of intangible assets |
|
- |
|
|
|
(4 |
) |
Purchases of property and equipment |
|
(14 |
) |
|
|
(40 |
) |
Purchases of short-term investments |
|
(31,934 |
) |
|
|
(19,298 |
) |
Sales of short-term investments |
|
- |
|
|
|
33,725 |
|
Net cash flows from (used in)
investing activities |
$ |
(31,948 |
) |
|
|
14,383 |
|
Cash flow from (used in)
financing activities: |
|
|
|
|
|
|
|
Net cash flows from (used in)
financing activities: |
$ |
- |
|
|
$ |
- |
|
Net foreign exchange
difference on cash and cash equivalents |
|
(15 |
) |
|
|
(22 |
) |
Net increase in cash and cash
equivalents |
$ |
2,952 |
|
|
$ |
33,587 |
|
Cash and cash equivalents at
beginning of period |
$ |
206,911 |
|
|
$ |
217,352 |
|
Cash and cash equivalents at
end of period |
$ |
209,863 |
|
|
$ |
250,939 |
|
Cash paid during year
for: |
|
|
|
|
|
|
|
Interest |
$ |
81 |
|
|
$ |
- |
|
Income taxes |
$ |
93 |
|
|
$ |
82 |
|
|
|
|
|
|
|
|
|
DoubleDown Interactive (NASDAQ:DDI)
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From Jun 2024 to Jul 2024
DoubleDown Interactive (NASDAQ:DDI)
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From Jul 2023 to Jul 2024