Good afternoon, and welcome to Double Down Interactive's Earnings Conference Call for the fourth quarter ended December 31, 2025. My name is Cherie, and I will be your operator this afternoon. Prior to this call, Double Down issued its financial results for the fourth quarter of 2025 in a press release, a copy of which is available in the Investor Relations section of the company's website at www.doubledowninteractive.com. You can find the link to the Investor Relations section at the top of the home page. Joining us on today's call are Double Down CEO, Mr. In-Kut Kim, and its CFO, Mr. Joe Seagriff. Following their remarks, we will open the call for questions. Before we begin, Joe Giafone, the company's Investor Relations advisors, will make a brief introductory statement.

Thank you, Cherie. Before management begins their formal remarks, we need to remind everyone that some of management's comments today will be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Act of 1934 as amended, and we hereby claim the protection of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements about future events and include expectations and projections, not present or historical facts, and can be identified by the use of words such as may, might, will, expect, assume, believe, intend, estimate, continue, should, anticipate, or other similar terms. Forward-looking statements include and are not limited to those regarding the company's future plans, merger and acquisition strategy, strategic and financial objectives, expected performance, and financial outlook. Forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially and adversely from what the company expects. Therefore, you should exercise caution in interpreting and relying on them. We refer you to Double Down's annual report on Form 20F filed with the Securities and Exchange Commission on April 21, 2025, and other SEC filings for a more detailed discussion of the risks that could impact future operating results and financial condition. These forward-looking statements are made only as of the date of today's call. The company does not undertake and expressly disclaims any obligation to update or alter the forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. During today's call, management will discuss non-IFRS financial measures which are believed by management to be useful in evaluating the company's operating performance. These measures should not be considered superior to in isolation or as a substitute for the financial results prepared in accordance with IFRS. A full reconciliation of these measures to the most directly comparable IFRS measure is available in the earnings release issued this afternoon. I'd like to remind everyone that this call is being recorded and will be made available for replay via a link in the Invest Relations section at Double Down's website. Thank you for your patience with that, and it's now my pleasure to turn the call over to Double Down's CEO. our AK Kim. Go ahead, please.

Thank you, Joe. Good afternoon, everyone. We are delighted to be with you today to discuss our first quarter and full year 2025 results. Key highlights include continued year-over-year growth of SuperNation, the first full quarter contribution from WOW gains, the significant growth of our direct consumer revenue stream, and continued strong profitability from our business model. We continue to demonstrate our ability to deliver strong adjusted EBITDA and drive high levels of cash flow, fundamental factors that we believe will contribute to increased shareholder value. Let's start with the quarterly results. This afternoon, we reported first-quarter consolidated revenue of $95.8 million, up 17% year-over-year, and adjusted EBITDA of $40.6 million, up 16% year-over-year. In Q4, we again delivered on our operating priority to drive a high conversion of revenue to profit and cash flow. Net cash flow from operations was $42.6 million in the quarter, bringing the total for full year 2025 to $136.8 million. And we continue to deliver this profit and cash flow results as we invested in new player acquisition activities at SuperNation. Our social casino business continues to be the engine of profit and cash flow generation for the company. In the first quarter, social casino revenue grew 9% year-over-year to $79.7 million dollars driven by our first full quarter of contribution from wow games wow games benefits from broad payer engagement which as you can see is reflected in our strong q4 total social casino payer conversion rate of 9.6 percent this is up from a conversion rate of 6.9 percent in q4 2024 Conversely, WoW gains payers, on average, spend less than those from the traditional double-down social casino business, resulting in lower total social casino monthly average revenue per payer of $198 as compared to $282 in Q4 2025. We have spent the last few months working closely with WoW Games and see operational and product synergies between it and our traditional double-down social casino business. In addition, while the overall social casino market has growth challenges, we see growth potential outside the United States and look to further leverage the WoW Games acquisition particularly in Europe. As discussed in the past, we have been working hard to increase the direct-to-consumer or DTC elements of our social casino revenue. Wild Games benefits from a relatively large DTC component due to its strong web-based history. And mostly importantly, we significantly ramped DTC purchases made in Double Down Casino in Q4. During the quarter, we launched product features and introduced purchase offers, which focused on DTC. As a result, DTC revenue exceeded 30% of our total social casino revenue in the first quarter. We plan to continue to optimize our social casino business to benefit from the DTC transition and are focused on driving further growth of DTC revenue as a percentage of our overall social casino revenue in 2026. Turning to our iGaming business, SuperNation's Q4 2025 revenue was $16.1 million, dollars, up 78% year-over-year. For perspective, SuperNation's quarterly revenue run rate has more than doubled since DoubleDown closed this acquisition a little more than two years ago, as we continue to make positive progress on acquiring new players while implementing product and operation improvements. From an innovation perspective, we fully launched our first iGaming Casino title called Los Vegas in the UK market and are now working to optimize its marketing strategy and operations as we look to ramp its player base and bring the brand to other market. You can see from our results that our potent investments are continuing to provide growth opportunities and enhanced player engagement, resulting in strong profits and cash flow. We continue to demonstrate the ability to successfully integrate acquisitions while we innovate in our core business. Now I will turn it over to our CFO, Joe Stigris, to walk us through our financial before providing my closing remarks. Joe?

Thank you, IK, and good afternoon, everyone. To review, revenues for the fourth quarter of 2025 were $95.8 million and were comprised of $79.7 million in revenues from our social casino business and $16.1 million of revenues from SuperNation. This compares to total company revenues of $82.0 million in the fourth quarter of 2024. Our social casino segment grew 9% from the fourth quarter of 2024 to the $79.7 million level as we realized our full first quarter of wow game revenue. iGaming revenues grew 78% year over year to $16.1 million and were essentially flat from Q3 2025 as we began moderating previous increases in spending to acquire new players. As we have done since acquiring the business, we closely monitor the projected ROI of the marketing investment of SuperNation and make adjustments as appropriate based on these projections. IK discussed the influence of WoW Games on our overall social casino KPIs, which have helped increase the payer conversion rate while reducing the average monthly revenue per payer in the fourth quarter of 2025 as compared to Q4 2024. One reason for this dynamic is the greater proportional use of Android mobile devices versus Apple devices in Europe as compared to the U.S. Specifically, the pair conversion rate, which is the percentage of players who pay within the social casino apps, increased to 9.6% in Q4 2025 compared to 6.9% in Q4 2024. Average revenue per daily active user, or ARPDAO, of $1.35 was up from $1.30 in Q4 of 2025. And average A monthly revenue per payer was $198 in Q4 2025, down from $282 the prior year period. In the fourth quarter of 2025, operating expenses were $65.9 million compared to $47.8 million in the fourth quarter of 2024. The increase is primarily due to impairment loss recognized for SuperNation's goodwill. and increased operating expenses from the addition of WoW games compared to the prior year period, partially offset by lower R&D expenses. Sales and marketing expenses for the fourth quarter of 2025 were $16.5 million compared to $10.4 million in the fourth quarter of 2024. In Q4, we optimized spending to acquire new players for Double Down Casino, invested in advertising spending for SuperNation to focus on new player acquisition and absorbed a full quarter of marketing expenses at WoW Games for the first time. Profit, excluding non-controlling interest for the fourth quarter of 2025, decreased 31% to $24.7 million or earnings per fully diluted common share of $9.72.49 per ADS in the fourth quarter of 2025 compared to profit for the interim period of $35.7 million or earnings per fully diluted common share of $14.40, $0.72 per ADS in Q4 of 2024. The decrease primarily reflects the impairment loss on supernation goodwill. Looking beyond the impairment charge, adjusted EBITDA for the fourth quarter of 2025 rose to $40.5 million compared to $35.3 million for the fourth quarter of 2024 and $37.5 million for Q3 2025. Adjusted EBITDA margin was 42.3% for Q4 2025, as compared to 42.8% in Q4 2024, and 39.1% in Q3 2025. Net cash flows provided by operating activities in Q4 2025 were $42.6 million, compared to $45.9 million in Q4 2024. And for all of 2025, despite a number of changes to our operations, we again generated significant free cash flow as net cash flows provided by operating activities were $136.8 million. With this meaningful generation of cash in 2025, we had $490 million in cash equivalents and short-term investments with a net cash position at December 31, 2025 of approximately $455 million, or approximately $9.19 per ADS. Now I'll turn the call back to IK for closing remarks.

Thank you, Joel. Double Down Interactive is delivering strong profit and cash flow from our two meaningful and exciting businesses, Social Casino and iGaming. In 2026, we are continuing to innovate and enhance these businesses through product, live operations, and marketing improvements. For example, we recently launched new meta features in Double Down Casino, including the supreme fuel, which gamifies the player opportunities to increase their purchase motivation. And we are continuing to generate ways for players to further take advantage of DTC purchase options, thereby allowing us to further expand social casino margins. Our strong balances and cash positions allow us to make disciplined investments in each of our businesses while continually evaluating new opportunities to enhance the growth of each. This includes investments through both organic means as we leverage the strengths of our talented teams, and through our evaluation of potential future acquisitions. We are now happy to take your questions.

Thank you. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, press star 11 again. Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster. And our first question will come from the line of David Bain with Texas Capital Bank. Your line is open.

I, Kay, and Joe, nice quarterly execution again. Maybe if you could help us bifurcate Double Down Casino and WOW revenue contribution and growth, and I assume just based on the D-to-C mix, WOW has a pretty high mix. Could you bifurcate D-to-C gains and mix for both WOW and Double Down as well?

Yeah, thanks, Dave. Appreciate that. Yeah, going forward, we're going to, as we started in Q3, continue to formally report our KPIs and our revenue in the social casino sector and not specifically quantify wow games versus, you know, the traditional double down social casino business. But I can say that in both cases, the businesses held their own during the quarter. Certainly, as we continue to look at, for instance, the industry reports, we know that the social casino sector was down slightly in the year in 2025. And so, you know, from a growth perspective, you know, both companies or both entities of ours are working hard to grow in, you know, what is obviously a very mature category. Relative to DTC, yes, I mean, I definitely want to highlight that, well, two things. One, as you mentioned, the DTC element, if you will, in WoW games has always been quite high because many of their players actually still play through the website, whether it be on their phone or on their computers. And they historically have had a large kind of non-app store contribution from their purchasers. But at the same time, I don't want that to mask the really significant increase we saw on the traditional double-down casino side in ramping DTC. And obviously, from just a pure size perspective, that is the largest contributor to our overall revenue and certainly was the largest contributor to the increase in our DTC results.

Awesome. Very helpful. And then I guess my follow-up would be just, you know, the leader of the social casino group announced some employee reductions recently, and they're going to rely more on AI and automation. One, can we get an update as to what, you know, Double Down and Wow, you know, the combined company is doing from that standpoint? And then again, if we look at the industry just from a bigger picture, and you see, you know, aristocrats recent divestiture of non-social casino assets i don't know if they lean more into marketing i guess the question is um are you seeing you know the the broader promotional landscape is rational um elevated or even benign as as just you know revenue for the sector continues to to be on the current growth trajectory some kind of two questions one One on AI and automation and the other on just promotions out there.

Yeah. No, I'll take the second one and then I can talk about AI. You know, relative to the business, I mean, obviously, as this industry has matured, we've all had to, you know, deal with, you know, making our businesses more and more profitable. And, in fact, one of the things that, you know, I think we've been recognized for is, you know, early on not going crazy as it relates to overspending, frankly, to acquire new players. You know, we moderated our player acquisition spend, you know, back, boy, two, three years ago. And, you know, we've been staying very disciplined to, you know, to our measuring systems and how we predict LTV, you know, et cetera, et cetera. And, you know, I think that, you know, as we look forward, social casino and the social casino business is all about efficiency. Yes, it's about innovation. Yes, it's about doing everything we can to continue to acquire new players and get our players to be excited about playing and ultimately purchasing. And at the same time, just becoming more and more efficient in all aspects of that business. And to that end, AI is an important element. So I'll turn it over to Ike. He can talk a bit about AI, I think, in that context.

Hi, David. You know, AI is everywhere nowadays and already driving meaningful change across the broader technology and gaming industry, and DDI is no exception. First, in content production, AI is helping us accelerate asset creation, localization, and early-stage post-typing. So, this shortens development cycles already and improves our ability to test concepts and meta features more efficiently. Second, in live operations, AI-driven analytics enable us to better personalize player experience, including offers, challenges, and engagement mechanics based on behavioral patterns and real-time data. And third, in marketing optimization, as you mentioned, AI enhances our audience targeting pre-season, creative iteration speed, and performance monitoring supporting stronger ROI discipline. So we are building these capabilities thoughtfully and responsibly, integrating AI into our workflows while maintaining strong creative and operational oversight. Overall, AI is not just about cost efficiency for us. It is about increasing speed, improving decision quality, and ultimately enhancing returns across the business. Thank you. Very helpful. Thank you.

One moment for our next question. And that will come from the line of Aaron Lee with Macquarie. Your line is open.

Hey, thanks for taking my question. I guess on Super Nation, I believe you mentioned moderating the previous increases in customer acquisition spend, is that just kind of temporary or is that signaling a shift more towards driving profitability? And how should investors be thinking about the long-term margin structure of that business?

Yeah, no, it's definitely, I guess, a reaction, if I can use that term, to what I mentioned earlier, which is staying true to our discipline relative to measuring the ROI of acquiring new players. And what we've seen, I think as we've discussed for the past several quarters, we were able to really lean into marketing and acquiring new players in SuperNation without reaching that threshold of payback and ROI. But more recently, you know, we have started to, you know, kind of bump up against the threshold where we've decided, at least on a sequential basis, you know, to moderate the spend or, in a sense, to moderate the increase. Because we spent essentially the same amount from Q3 to Q4. We just didn't increase it again. And in 2026, it'll be interesting to see. I mean, there are a number of changes going on. Many people, I think, understand that there are gaming tax changes specifically in the UK for online games. And so we're going to have to deal with that and we're going to have to deal with what is, I think, an exciting opportunity as we further invest and lean into this fourth brand for SuperNation that we launched. And so we're going to have to continue just to be mindful of our disciplined approach to spending marketing dollars.

Gotcha. Okay, that's helpful. Then on direct-to-consumer, yeah, really impressive results there. Nice growth with WoW Games, but you also mentioned on the traditional Double Down Casino side as well. I guess any updated thoughts on where this can go over the next few quarters? Thank you.

Uh, yeah, I mean, I think, um, I think I'll, I'll definitely speak for IK in saying that our ability to take advantage of, um, DDC, again, wild games aside, just on our traditional business, um, has even been faster than we would have thought. And, you know, I'm not going to say that there's, you know, what the limit of that is, you know, what the plateau level will be, but we're not there yet, for sure. And we're going to continue to ramp DTC revenue as a percentage of our overall social casino revenue. And so that's what we're continuing to work on from a product and a messaging standpoint, you know, in-app communications and all the rest. And as I think IK mentioned, we even have new things that we've already launched this quarter to take advantage of that.

That's great. Thank you so much.

One moment for our next question. That will come from the line of Eric Handler with Roth Capital. Your line is open.

Good afternoon. Thanks for the question. So I know you guys get asked this question a lot, but I understand you're looking for acquisitions to grow the business. But when you think about how much free cash flow you generate a year, I mean, if you allocated 20% to capital returns, you'd still have over $100 million or $2 per share to grow your existing cash base. You're definitely, you know, overcapitalized at this point. So is there any gating factor that's preventing you from either thinking about a buyback or a dividend? Or is there something that would signal that you're ready to return capital?

Yeah, thanks for the question. I would definitely just reinforce the fact that long-term shareholder value and return to shareholder are topics that are top of mind for the company, have been and continue to be. management and the board and our controlling shareholder continue to discuss ways to create shareholder value. And as you said, the results so far, at least up until now, has been a strong consensus that the way to create long-term shareholder value is through our M&A strategy, dealing with kind of the biggest challenge we have in the company, which is the very mature nature of the social casino business. That being said, there isn't any particular trigger or any particular event that would say we can do more than that with our cash balance, other than the fact that it gets bigger and bigger, and we certainly are mindful of that, and we certainly want to be sensitive to having such a large balance sheet. And so not only do we continue to talk about long-term shareholder value and return to shareholder, we also continue to discuss ways that we can do more than one thing at a time with our strong balance sheet. And as I said, those are very, you know, always very present and, you know, in very much the minds of everybody who's associated with this company.

Okay. And then as a follow-up, I'm curious just from an accounting standpoint, has something changed at all with SuperNation that caused you to take an impairment charge?

Well, we do do valuations of our goodwill, and whether that be for the original purchase of Double Down Casino or the Double Down Business or the two acquisitions we've done, we do those at the end of the year or in the fourth quarter. And so you may recall or may remember that we did a very large goodwill write down for the original double down acquisition two years, two or three years ago. And so, you know, it was just, this is the time that we do it. And, you know, based on, you know, what the, you know, the various third parties analysis was, you know, that that was the result. Obviously, it's non-cash. It doesn't affect EBITDA. And, you know, that was the outcome. Okay, thanks.

One moment for our next question. That will come from the line of Josh Nichols with B-Rally Securities. Your line is open.

Yeah, thanks for taking my question. Yeah, I probably would echo the previous caller's notes about the company being overcapitalized. The EV is negative at this point, despite doing $160-plus million of annualized free cash flow. And I appreciate the focus, as you describe it, for shareholder value. But I think, you know, by most people's definition, that would mean getting the stock price and, you know, the EV to positive and ideally with a multiple. But, you know, to digress, looking at the aggaming piece of the business, it was, you know, essentially flat quarter over quarter. Clearly, I know you mentioned you've been optimizing the spending there. But how should we think as we model like 2026, the dynamics between sequential growth versus profitability for that space? Is it clear to you what direction you're leaning or are you going to be focusing more on growth or profitability going forward from here?

I'm sorry, Josh, you said on the social casino business, right?

No, on the iGaming piece.

Oh, I'm sorry. Yeah, I mean, like I said, it's really based on what we're seeing almost in real time. You know, the biggest, other than gambling tax, the biggest expense in the business is marketing. It is acquiring new players. And we have this disciplined approach to marketing and to spending to acquire players. So I definitely believe that we're going to continue to spend and to spend to acquire players. I think the question is only going to be, you know, kind of what level of increase will we make? I mean, we're not going to pull back on our spend. It's just a question of, you know, how much more quarter to quarter will we spend? And again, that goes back to blame the algorithms to the algorithms on the LTV and the payback period and the like.

And then just one follow-up for me. I mean, I think a lot of the stuff has already been hit on AI, wow, DTC. One thing I was curious about on the social casino side, you know, given some of the legislative changes we're seeing in places like California, sweepstakes bands and whatnot. Are you seeing any easing of pressure in terms of like marketing or customer acquisition costs on that front? or what's your expectation as we look forward to 2026 now that there's been some significant action taken by a number of states on that front?

Yeah, no, that's a really good question, Josh. I mean, the really rapid rise of legislation in sweepstakes is really interesting. as i think um we mentioned in past quarters and some of our peers have as well you know the pressure that the growth of sweeps has uh on on marketing costs were significant you know i'd like to say that that it's reverted back to some you know kind of lower level but i think one of the things that we learn over time is that the costs to acquire players regardless of what sector of gaming don't ever seem to go down. But I think, you know, the increases that we saw, especially during the period where sweeps were kind of taken the country by storm almost, I think that pressure has lessened to a certain extent.

Appreciate it. Thanks. Yeah.

And one moment for our next question. And that will come from the line of Eric Gregg with FTIA. Your line is open.

Thank you. I have two questions. First one in comment seems like a pretty strong quarter, so congratulations on that. Joe, just going back on the impairment, you know, you didn't do the supernation deal that long ago. I think the business is roughly double what it was when you bought it. You know, it's just, what was the magnitude of the goodwill write down? And again, it just, it seems surprising that any kind of goodwill write down would need to happen when you've had such robust growth through the business. So if you just could help me understand that a little bit better.

Yeah, it was around $8 million.

Yeah.

And, you know, we paid, the upfront was $35 million or so. So that kind of gives you the relative size of it. And, you know, to a great extent, we're driven in these cases by, you know, what the third party, you know, valuation experts conclude. And, you know, that's kind of – that's where it ended up this year to address the goodwill balance.

So they're looking at comparables or something or weighted average cost of capital?

I'm not an expert, but I have obviously reviewed their report. I mean, they have a number of different ways they look at, you know, valuation, you know, the valuations of this. And, you know, that includes comparables and weighted average cost of capital and peers in both public and private markets and a bunch of things.

Okay. And then the next question is really directed at IKB. Joe, you gave some feedback on the capital allocation front. At this point, the company is trading at a negative enterprise value. And one could argue that's a referendum on the concern over the lack of savvy capital allocation policy. or maybe about its current focus on its growth policy over taking advantage of this. It's hard to see how the company can buy any other business at a negative enterprise value, how it could do any other acquisition at a negative enterprise value. And so buying in its own shares at a negative enterprise is incredibly compelling. So, IK, can you just help us understand what's taking so long to, you know, for the management to come around to that thinking? Or is that just, you know, is this a cultural issue that, you know, it's just hard to get around, especially giving us more context, given that W Games has been buying back stock. And so just help us understand all that.

So if you don't mind, I'll ask IK to answer as well. But I'll just kind of do a preview here and just say that one of the things that has been really positive, you know, relative to buybacks is, you know, the activity that occurred last year through the sale of sticks, the private equity firm that helped buy double down in Korea, the sale of those shares and the expansion of the public float. So I think that just before IK makes his comment, I'll say that that definitely is something that was important relative to a buyback because it does increase the float. And so it makes us less concerned about basically us buying back and then making what was at least already a very small amount of float even smaller. but ike do you want to say anything about um about w and and w strategy um for for buybacks oops ike are you there can you hear me oh now we can sorry ah sorry yep uh i cannot speak for

w games but as long as i understood um w games also um pursue um growth um leveraging ddi's growth as well so uh they will take care of um ddi's goals as well um yeah but we're not just okay so its growth at all costs, regardless of whether it leads to negative enterprise value in the business?

Is that what we should interpret that as?

I certainly wouldn't interpret that from what IK said. I think what IK is saying is that, and let me just try to fill in the blanks here that, and this has come up in the past where people point to W having done buybacks themselves, I do know for a fact that that's not their primary strategy for their cash or their primary desire in order to kind of deal with their fairly low enterprise value relative to the size of their company. So I think it's, you know, it is similar to us in the sense of they are, again, not speaking for them, that the focus of the company is on, their company is on growth as well. And obviously, since we roll up to them, that, you know, there's a desire for us to grow as well. Okay.

Thank you. Yep.

Thank you. This concludes our question and answer session. Thank you for joining us today for Double Down's Earnings Call. You may now disconnect.