DoubleDown Interactive Co., Ltd. Q4 FY2024 earnings call

bullet-points:

• Q4 2024 consolidated revenue was $82 million, adjusted EBITDA was $35.1 million.
• DoubleDown Casino had strong monetization KPIs like ARPDAU, payer conversion rate, and average monthly revenue per payer.
• SuperNation had its highest quarterly revenue under ownership in Q4 2024, over 30% higher than pre-acquisition estimates.
• Focus on enhancing entertainment value of DoubleDown Casino with meta features.
• Internally developing new games like casual match three type game, refining and optimizing based on feedback.
• Evaluating M&A opportunities to diversify revenue and cash flow.

In the fourth quarter of 2024, consolidated revenue was $82 million. The social casino/free-to-play games segment generated $73 million, which was 89% of Q4 revenue, and SuperNation (iGaming) generated $9 million, 11% of Q4 revenue. For the full year 2024, total revenue was $341.3 million, with social casino growing slightly and SuperNation contributing from its acquisition in Q4 2023.

bullet-points:

• Expect top line growth for SuperNation in 2025 by increasing investment in new player acquisitions.
• Continue driving player engagement and monetization while maintaining capital efficient discipline.
• Expect to extend generating attractive free cash flow and explore opportunities in adjacent gaming categories via in-house development and M&A.

bullet-points:

• Forward-looking statements subject to numerous risks and uncertainties that could cause actual results to differ materially from expectations.
• Refer to SEC filings for detailed risks impacting future operating results and financial condition.

Q: Hi guys, thanks for taking my question. I wanted to start with SuperNation. As you pointed out, it's been a year since the acquisition. So could you just reflect on your accomplishments with that over the past year? What went right? Maybe what's been surprising and you talked about increasing SuperNation's market share with increased marketing spend. Any other initiatives you would highlight maybe from a live ops or a content standpoint?

A: Yes. I think the marketing -- I'll speak to the marketing execution and maybe IK, you want to talk about product content or product development. But I highlight the marketing execution because what we've learned and found is that the ROI associated with acquiring new users has room to run. And as we have continued to test various different ways of acquiring new users. We have optimized around a set of channels and techniques that seem to be working. And this has allowed us to acquire more users, spend more money, but most importantly, do it profitably with the return that is well within our target. And so that gives us increase -- as the year went on, really gave us increased confidence that we could spend more money in the acquisition of new players. I mean, if you look at Q3 versus Q4 of this year, we, as a company, spent more -- somewhat more money in marketing, and that was entirely in spending more money with SuperNation. And that just reflects the confidence we have that will pay off, and it has almost immediately in the sense of ramping the revenue.

Q: Hi, good afternoon, Keuk and Joe, thanks for taking the questions. I wanted to follow up on SuperNation. Can you discuss, I guess, the efforts and investments you're making for market share growth. You talked about U.K. and Sweden. What kind of investments are you making there to grow your market share? And then kind of separately, like do you expect to expand SuperNation into new iGaming markets?

A: Yes. I think the major investment, as I mentioned a minute ago that is very visible and has almost frankly, an immediate impact is in marketing and in acquiring new users. And the monetization of new users is, especially in the U.K., but also in Sweden, is incredibly fast. And so our ROI targets, our payback period targets, the ones that we have from our social casino business are almost too modest compared to what we're seeing with the iGaming business. And so we really feel good about within reason, of course, spending more money there, and that's why you saw for instance, in Q4 the fact that we increased marketing as a company pretty much solely on the back of the investment in SuperNation. And IK mentioned also leveraging the brands and product development. I mean all of that is really in the focus on the kind of the high entertainment iGaming player. One of the things that you'll perhaps recall is the thing that attracted us most -- or one of the things that attracted us most of SuperNation -- they just weren't looking for the churn and burn gambler. They also have this idea of the entertainment style online slot player. And that really speaks to the fact that there's been a good investment in product development and feature development and brand development around the three major brands that they have.