EX-99.1 2 d356178dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

DoubleDown Interactive Reports First Quarter 2022 Results

SEATTLE, WASHINGTON – May 10, 2022 — DoubleDown Interactive (NASDAQ: DDI) (“DoubleDown” or the “Company”), a leading developer and publisher of digital social casino games, today reported its unaudited financial results for the first quarter ended March 31, 2022.

First Quarter 2022 Summary vs. First Quarter 2021

 

  •

Revenues decreased from $96.7 million in the first quarter of 2021 to $85.5 million in the first quarter of 2022.

 

  •

Adjusted EBITDA decreased from $33.1 million for the first quarter of 2021 to $26.9 million for the first quarter of 2022, resulting in an Adjusted EBITDA margin of 31.5% for the first quarter of 2022, compared to an Adjusted EBITDA margin of 34.2% for the first quarter of 2021.

 

  •

Net income decreased to $18.5 million, or $7.46 per common share on a fully diluted basis ($0.37 per American Depository Share (“ADS”)) in the first quarter of 2022, compared to net income of $19.4 million, or $8.77 per common share on a fully diluted basis ($0.44 per ADS) in the first quarter of 2021. Note each ADS represents 0.05 share of a common share.

 

  •

Average Revenue Per Daily Active User (“ARPDAU”) slightly decreased from $0.99 in the first quarter of 2021 to $0.97 in the first quarter of 2022.

 

  •

Average monthly revenue per payer increased from $212 in the first quarter of 2021 to $225 in the first quarter of 2022.

 

  •

Payer conversion decreased from 5.7% in the first quarter of 2021 to 5.5% in the first quarter of 2022. Payer conversion represents the percentage of monthly active users that made at least one purchase in a month during the quarter.

“Our business model remains resilient with a flexible cost structure as we generated $28 million in net cash flows provided by operations in the first quarter of 2022 and ended the quarter with a total of $268 million in cash and cash equivalents and short-term investments, providing us with a strong financial position,” said In Keuk Kim, Chief Executive Officer of DoubleDown. “Our Adjusted EBITDA grew sequentially in the first quarter of 2022 compared to the fourth quarter of 2021, as we intentionally scaled back our sales and marketing costs for ‘Undead World: Hero Survival’ to optimize our monetization strategy for the title, which also contributed to lower revenue sequentially. Looking ahead, we plan to add enhancements to ‘Undead World: Hero Survival’ with a focus on improved monetization metrics, while also building towards the release of additional non-social casino titles and continuing to evaluate potential M&A opportunities.”

Summary Operating Results for DoubleDown Interactive (Unaudited)

 

     Three Months Ended March 31,  
     2022     2021  

Revenue ($ MM)

    $ 85.5     $ 96.7  

Total operating expenses ($ MM)

    $ 60.8     $ 71.0  

Adjusted EBITDA ($ MM)

    $ 26.9     $ 33.1  

Net income ($ MM)

    $ 18.5     $ 19.4  

Net income margin

      21.6 %      20.1 % 

Adjusted EBITDA margin

      31.5 %      34.2 % 

Non-financial performance metrics

     

Average MAUs (000s)

      2,309       2,647  

Average DAUs (000s)

      975       1,082  

ARPDAU

    $ 0.97     $ 0.99  

Average monthly revenue per payer

    $ 225     $ 212  

Payer conversion

      5.5 %      5.7 % 

First Quarter 2022 Financial Results

Revenue in the first quarter of 2022 was $85.5 million, down 11.6% from the first quarter of 2021. The decrease was primarily due to the lifting of stay-at-home orders and other COVID-related restrictions in the first quarter of 2022 compared to the prior year.

Operating expenses in the first quarter of 2022 were $60.8 million, down 14.4% from the first quarter of 2021. The decrease was primarily due to decreases in cost of revenues, sales and marketing expenses, and depreciation and amortization expenses.

Net income in the first quarter of 2022 decreased to $18.5 million, or $7.46 per common share ($0.37 per ADS) on a fully diluted basis, compared to net income of $19.4 million, or $8.77 per common share ($0.44 per ADS) on a fully diluted basis, in the first quarter of 2021. Note each ADS represents 0.05 share of a common share.

Adjusted EBITDA in the first quarter of 2022 decreased to $26.9 million compared to $33.1 million in the first quarter of 2021. The decrease was primarily due to the decrease in revenue.

Net cash flows provided by operating activities for the first quarter of 2022 was $28.3 million, compared to $22.0 million in the first quarter of 2021. The increase was primarily due to the decrease in accounts receivable.

Conference Call

DoubleDown will hold a conference call today (May 10, 2022) 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 participate, please dial the number below at least five minutes prior to the start time and ask for the DoubleDown Interactive conference call.

U.S. dial-in number: 1-888-705-0418

International number: 1-929-517-9007

Conference ID: 6589864

The conference call will broadcast live and be available for replay here or at the below dial in.

A replay of the call will be available after 8:00 p.m. Eastern Time through May 24, 2022 at 8:00 p.m. Eastern Time.

Toll-free replay number: 1-855-859-2056

International replay number: 1-404-537-3406

Conference ID: 6589864

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. Our flagship 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.

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 Form 6-K to be 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 four line items: (i) remeasurement gains; (ii) acquisition expenses; (iii) amortization expenses related to intangible assets acquired; and (iv) depreciation expense. The below table sets forth the full reconciliation of our non-GAAP measures:

     Three Months Ended  
Reconciliation of non-GAAP measures (Unaudited)    March 31,  

(in millions, except percentages)

    2022     2021  

Net income

    $ 18.5     $ 19.4  

Income tax expense

      6.0       6.7  

Income before tax

      24.5       26.1  

Adjustments for:

     

Depreciation and amortization

      2.2       7.5  

Interest expense

      0.5       0.5  

Foreign currency transaction/remeasurement (gain) loss

      (1.9 )      (0.3 ) 

Short-term investments (gain) loss

      1.8       —    

Other income (expense), net

      (0.2 )      0.7  

Adjusted EBITDA

    $ 26.9     $ 33.1  

Adjusted EBITDA margin

      31.5 %      34.2 % 

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 Sigrist

ir@doubledown.com

+1 (206) 773-2266

Chief Financial Officer

https://www.doubledowninteractive.com

Investor Relations Contact:

Cody Slach or Jeff Grampp, CFA

Gateway Group

1-949-574-3860

DDI@gatewayir.com

DoubleDown Interactive Co., Ltd.

Condensed Consolidated Balance Sheets

(Unaudited)

 

     March 31,      December 31,  
     2022      2021  

Assets

      

Current assets:

      

Cash and cash equivalents

    $ 174,915      $ 242,060  

Short-term investments

      93,290        —    

Accounts receivable, net

      20,863        21,875  

Prepaid expenses, and other assets

      3,447        6,817  
  

 

 

     

 

 

  

Total current assets

      292,515        270,752  

Property and equipment, net

      408        384  

Operating lease right-of-use assets, net

      6,078        6,830  

Intangible assets, net

      51,511        53,679  

Goodwill

      633,965        633,965  

Deferred tax asset

      2,184        2,616  

Other non-current assets

      1,528        1,582  
  

 

 

     

 

 

  

Total assets

    $ 988,189      $ 969,808  
  

 

 

     

 

 

  

Liabilities and Shareholders’ Equity

      

Accounts payable and accrued expenses

    $ 13,584      $ 14,752  

Short-term operating lease liabilities

      3,089        3,076  

Income taxes payable

      1,739        —    

Contract liabilities

      1,573        2,246  

Other current liabilities

      683        730  
  

 

 

     

 

 

  

Total current liabilities

      20,668        20,804  

Long-term borrowings with related party

      41,295        42,176  

Long-term operating lease liabilities

      3,855        4,688  

Deferred tax liabilities, net

      30,880        28,309  

Other non-current liabilities

      11,090        9,953  
  

 

 

     

 

 

  

Total liabilities

      107,788        105,930  

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

      671,831        671,831  

Accumulated other comprehensive income

      21,061        23,033  

Retained earnings

      166,311        147,816  
  

 

 

     

 

 

  

Total shareholders’ equity

      880,401        863,878  
  

 

 

     

 

 

  

Total liabilities and shareholders’ equity

    $ 988,189      $ 969,808  
  

 

 

     

 

 

  

DoubleDown Interactive Co., Ltd.

Condensed Consolidated Statement of Income and Comprehensive Income

(Unaudited)

 

     Three Months Ended March  
     2022     2021  

Revenue

    $ 85,486     $ 96,667  

Operating expenses:

     

Cost of revenue(1)

     28,848       33,848  

Sales and marketing(1)

     19,791       19,728  

Research and development(1)

     4,680       5,691  

General and administrative(1)

     5,270       4,304  

Depreciation and amortization

      2,212       7,476  
  

 

 

    

 

 

  

Total operating expenses

      60,801       71,047  
  

 

 

    

 

 

  

Operating income

      24,685       25,620  

Other income (expense):

     

Interest expense

      (470 )      (509 ) 

Interest income

      208       51  

Gain on foreign currency transactions

      121       243  

Gain (loss) on foreign currency remeasurement

      1,769       45  

Gain (loss) on short-term investments

      (1,761 )      —    

Other, net

      (35 )      657  
  

 

 

    

 

 

  

Total other income (expense), net

      (168 )      487  
  

 

 

    

 

 

  

Income before income tax

      24,517       26,107  

Income tax expense

      (6,022 )      (6,691 ) 
  

 

 

    

 

 

  

Net income

    $ 18,495     $ 19,416  

Other comprehensive income (expense):

     

Pension adjustments, net of tax

      (526 )      (55 ) 

Gain (loss) on foreign currency translation

      (1,446 )      1,329  
  

 

 

    

 

 

  

Comprehensive income

    $ 16,523     $ 20,690  
  

 

 

    

 

 

  

Earnings per share:

     

Basic

    $ 7.46     $ 8.77  

Diluted

    $ 7.46     $ 8.77  

Weighted average shares outstanding:

     

Basic

      2,477,672       2,214,522  

Diluted

      2,477,672       2,214,522  

 

(1)

Excluding depreciation and amortization

DoubleDown Interactive Co., Ltd.

Condensed Consolidated Statement of Cash Flows

(Unaudited)

 

     Three months ended March 31,  
     2022     2021  

Cash flow from (used in) operating activities:

     

Net Income

    $ 18,495     $ 19,416  

Adjustments to reconcile net income to net cash from operating activities:

     

Depreciation and amortization

      2,212       7,476  

(Gain)Loss on foreign currency remeasurement

      (1,769 )      (45 ) 

(Gain)Loss on short-term investments

      1,762       —    

Deferred taxes

      2,950       1,925  

Working capital adjustments:

     

Accounts receivable

      (332 )      (11,583 ) 

Prepaid expenses, other current and non-current assets

      3,398       1,694  

Accounts payable, accrued expenses and other payables

      (175 )      (962 ) 

Contract liabilities

      (673 )      (446 ) 

Income tax payable

      1,739       3,777  

Other current and non-current liabilities

      775       780  
  

 

 

    

 

 

  

Net cash flows from (used in) operating activities

      28,382       22,032  

Cash flow from (used in) investing activities:

     

Purchases of intangible assets

      (2 )      —    

Purchases of property and equipment

      (72 )      (34 ) 

Purchases of short-term investments

      (98,971 )      —    

Sales of short-term investments

      5,226       —    
  

 

 

    

 

 

  

Net cash flows from (used in) investing activities

      (93,819 )      (34 ) 

Cash flow from (used in) financing activities:

     
  

 

 

    

 

 

  

Net cash flows from (used in) financing activities:

      —         —    

Net foreign exchange difference on cash and cash equivalents

      (1,708 )      (750 ) 
  

 

 

    

 

 

  

Net increase (decrease) in cash and cash equivalents

      (67,145 )      21,248  

Cash and cash equivalents at beginning of period

      242,060       63,188  

Cash and cash equivalents at end of period

      174,915     $ 84,436