DoubleDown Interactive’s chief executive, Kim, stated that the forthcoming takeover of SuprNation will unlock fresh online gambling prospects for the company, following a dip in the firm’s second-quarter earnings.
DoubleDown’s second-quarter earnings dipped by 6.7% year-on-year to $75.2 million (£59 million/€68.5 million). The social gaming developer attributed the decrease to players returning to their usual routines after COVID-19 restrictions were lifted, and consumer entertainment habits reverting to normalcy.
The developer also pointed to the influence of inflation and global economic anxieties on player behavior.
However, CEO Kim remains hopeful about the future, highlighting the impending acquisition of SuprNation. The deal, anticipated to finalize later this year, will enable DoubleDown to venture into the real-money gaming arena.
“We have the ability to consistently generate positive cash flow, coupled with a robust balance sheet boasting over $150 million (£117.6 million/€136.6 million) of uncommitted capital, providing us with the adaptability to invest in new game categories and high-demand market opportunities,” said Kim.
“This includes entering the online gambling arena through our pending acquisition of SuprNation, which is projected to conclude later this year.”
We are heartened by our achievements in the initial six months of the year and anticipate continuing to produce substantial cash flow for the remaining portion of 2023 and beyond.
DoubleDown’s Second Quarter: Revenue Declines, Expenses Reduced
The company’s revenue for the quarter was $75.2 million, a 6.7% decrease from the same period last year and a 3.1% drop from the $77.6 million recorded in the first quarter.
Monthly active users (MAU) experienced a 22.5% year-over-year decline to 1.8 million, and daily active users (DAU) also fell to 793,000. However, the average monthly revenue per player saw a slight increase to $235.
On the expenditure side, operational costs decreased by 62.9% to $47.7 million. This reduction was primarily attributed to the inclusion of expenses related to the Washington class action lawsuit last year.
DoubleDown also reported $4.4 million in financial-related income, encompassing interest income and foreign exchange gains. As a result, pre-tax profit reached $31.9 million, in contrast to a loss of $46.1 million in the previous year.
The developer paid $7.6 million in taxes, resulting in a net profit of $24.4 million, compared to a loss of $34.1 million in 2022. After taking into account pension adjustments and foreign exchange fluctuations, net profit stood at $24.2 million, compared to a net loss of $37.3 million in 2022.
Adjusted EBITDA also saw an increase, rising from $25 million to $27.6 million.
DoubleDown’s First-Half Performance Mirrors Second Quarter
For the six months concluding on June 30, revenue amounted to $152.8 million, representing an 8.0% decrease from the preceding year.
Operational costs decreased by 47.3% to $99.9 million, again due to expenses related to legal settlements. Financial income reached $9 million.
DoubleDown experienced a strong first half of the year, generating a pre-tax profit of $62.3 million. This represents a significant turnaround from the previous year, where they incurred a loss of $21.6 million.
After accounting for taxes of $14.3 million, DoubleDown achieved a net profit of $48 million. This marks a substantial improvement compared to the $15.6 million loss recorded in the same period last year. When considering pension adjustments and currency fluctuations, the net profit amounted to $46.6 million. In the corresponding period of the previous year, they incurred a loss of $20.8 million.
DoubleDown also witnessed a positive increase in their adjusted EBITDA, which rose by 2.1% to $53 million.
Kim remarked, “DoubleDown’s business approach is highly effective, and we maintain a disciplined approach to expenditure. This has contributed to our strong profitability, as evidenced by our 34.7% profit margin in the first half of 2023.”