DoubleDown Interactive Co., Ltd. Q3 FY2025 earnings call

• DoubleDown delivered strong Q3 results with consolidated revenue of $95.8 million and adjusted EBITDA of $37.5 million.
• Social Casino's flagship DoubleDown Casino app is the profit and cash flow engine. ARPUDAU was $1.39 in Q3 2025, up from $1.30 in Q3 2024, and payer conversion rate rose to 7.8%.
• Increased DTC percentage of Social Casino revenue, aiming for over 20%.
• SuprNation had Q3 revenue of $16.2 million, the highest since acquisition, with investment in new player acquisition expected to drive further growth in 2026.
• Acquired WHOW Games in July, with initial encouraging results and assessment of its operations and potential product synergies.
• M&A pipeline is busy, looking at both well-known gaming assets and new ones across different genres.

In the third quarter of 2025, DoubleDown Interactive's consolidated revenue was $95.8 million. The Social Casino operations generated $79.6 million, accounting for approximately 83.1% of the total revenue. This segment grew nearly 6% from the third quarter of 2024 and nearly 15% sequentially, with initial contributions from the WHOW Games acquisition. The iGaming business, SuprNation, generated $16.2 million, making up approximately 16.9% of the total revenue. SuprNation's Q3 revenue was the highest since its acquisition in late 2023 and grew $700,000 sequentially, with its quarterly revenue run rate more than doubling since the acquisition.

-有望全年自由现金流超1亿美元。 -认为对SuprNation的新玩家获取投资可能推动2026年进一步成功增长。 -计划推出新的首个iGaming赌场品牌。 -持续关注符合标准的并购目标以扩张业务和多元化收入来源。

-前瞻性陈述受众多风险和不确定因素影响，实际结果可能与预期大相径庭，包括市场、竞争、监管等方面风险，如加利福尼亚禁令可能影响用户获取成本等。

Q: Maybe to start with SuprNation. So you've driven really nice growth out of that asset over the last couple of quarters, another over 100% growth in 3Q. Maybe share your thoughts on how you're thinking about the balance between investing for growth versus profitability from here?

A: Yes. Thanks, Aaron. The reality is that we really believe that -- have believed that there was capacity in SuprNation's business to add users profitably. And as you know, we measure not only in our iGaming business, but in the Social Casino business as well, the ROI of all the cohorts that we acquired when we market to acquire new players. And the good news is adding new players to the SuprNation business continues to meet our targets for return on ad spend. As we go forward, we'll just continue to monitor that. And when -- and I think we've talked before that essentially our payback period for acquiring new users about 6 months. And as long as we're achieving or hopefully even beating that threshold, we'll continue to add players. But if not, we'll dial it back and spend less to acquire new players.

Q: On WOW Games, now that you've had some more time with that business and the team there, has anything changed in terms of how you think about the drivers of growth or the ramp timeline for that acquisition?

A: Yes. It seems like it's been a long time, but it was just July when we closed the deal, and there's still work for us to do to really dig in. But so far, so good. We are, as I think I can mentioned excited about the growth in the European Social Casino sector, and we want to lean into that as much as we can. Again, just as I mentioned with the SuprNation, it's all about the road, the return on ad spend as we acquire new players, and so that's first and foremost on our mind. And then secondly, it's about product, product development. So slot games, how we could help them relative to potentially even bringing some of the slot games that we have in the other parts of our Social Casino business into their apps and how we could help on the technology side and meta features. And so that's kind of a next level evaluation that we're making as we're always looking to improve the product as well.

Q: Just real quick, it looks like we're seeing potentially some stabilization in the Social Casino business. I didn't hear if you broke it out. What was the revenue contribution from WHOW for the quarter?

A: Yes. We haven't broken it out, and we're not going to separate it since it's all integrated with our segment reporting for Social Casino, but it was consistent with what we had previously said was essentially the run rate of their business. So there was no real surprise there from Laos operations in the summer.

Q: There's been a lot of action that's being taken again like stat comps. You've seen things in California, there's a ban that's going into effect for overall. I'm curious historically, that had been pushing user acquisition costs higher. You're also seeing some potential action from Google on advertising. Has that started to alleviate some of the player acquisition costs? And is there an opportunity for you guys to deploy some additional capital to start growing that user base? Or are you not seeing much of an effect yet?

A: Yes. No, I appreciate you mentioning what's going on in Sweepstakes category. It's obviously very interesting. I think it's a little early for it to have. And you're right, by the way, we've said it's probably the biggest impact on us that we can have perceived with the sweepstakes business is upward pressure on CPIs on advertising costs. I think it's a little early given that California's ban just kicked in and some of the other states actions are early. But it's a little too soon to determine if that's going to have an impact on lowering cost. But I think all in all, none of this can hurt and we're obviously glad to see it.

Q: I guess I would first ask about direct-to-consumer. I know you're at 5% in 2Q and you're over that in 3Q. And I, you mentioned 20% is the goal. And if that's the case, I was wondering if you could put a time frame on that? And then also, is that sort of like an interim goal? I'm just looking at the industry leader. Was it 31% in 3Q and they want to get to 40% over 2 years? So I'm just kind of wondering what your overall thought process is with D2C.

A: Well, let me answer the target question. And if IK, if you want to talk a little bit about what we're doing to even accelerate our results in D2C, I'll let you do that. But yes, our -- and I think IK mentioned that our goal is to exit Q4, exit this quarter with a run rate of over 20% D2C. So we really think that it's possible to achieve something considerably higher than what we did over the last 6 months. And we've been doing some product work and we've been afforded. I think, based on what's happening in the industry as a whole, the ability to be more aggressive in messaging and in product and that kind of thing. IK, do you want to talk a little bit about what we're doing... In Keuk Kim: Yes, for the broader D2C co-system especially in terms of providing more flexibility in how developers can communicate with transact direct with users, the recent direction of this platform is very helpful. At DDI, we've already been investing in our own D2C capabilities particularly through our own channels and direct CRM strategy. We engage players more freely and cost effectively outside of traditional platform constraints which opens up potential for margin expansion and improved lifetime value. We view this as a long-term tailwind for our business and for the industry at large.

Q: Any update on geographic expansion?

A: Dave, I'd say that we still feel like there's low-hanging fruit relative to the markets we're already serving, given how low our book share is. And so we're continuing to evaluate new markets. It's a more long-term thing. And we have room to run with our existing markets. So I wouldn't put a time frame on expansion, but we're always continue to evaluate that.