Good afternoon and welcome to Double Down Interactive's earnings conference call for the first quarter ended March 31st, 2026. My name is Lateef and I will be your operator this afternoon. Prior to this call, Double Down issued its financial results for the first quarter of 2026 and 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 homepage. Joining us on today's call are Double Down CEO, Mr. N. Cook Kim, and its CFO, Mr. Joe Sigrist. Following their remarks, we will open the call for questions. Before we begin, Joe Giafone, the company's Investor Relations advisor, will make a brief introductory statement. Mr. Giafone.

And thank you, Lateef. And 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 Exchange Act of 1934 as amended, and will hereby claim the protection of the safe harbor provision 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 use of the 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 SEC on March 31, 2026, 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 this 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 management believes 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 financial financial results prepared in accordance with ifrs a full reconciliation of these measures to the most directly comparable ifrs measures is available in the earnings release issued this afternoon i would like to remind everyone that this call is being recorded and will be made available for replay by the link in the investor Relations section on 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 CEO, Aike Kim. Aike, please go ahead. Thank you, Joe.

Good afternoon, everyone. We are delighted to be with you today to discuss Double Down Interactive's first quarter 2026 results. Key highlights include overall financial results reflecting a solid start to 2026, the high quarterly revenue at SuperNation since our acquisition of the business back in 2023, significant continued growth of our direct consumer social casino revenue, and another quarter of delivering consistent profitability and significant free cash flow. We believe these results validate our strategy and demonstrate demonstrate our ability to drive operational excellence across our portfolio. Let's start with the financial results. This afternoon, we reported first quarter consolidated revenue of $94.1 million, up nearly 13% year-over-year, along with adjusted EBITDA of $38.2 million, up 24% year-over-year. In Q1, we again delivered on our priority to drive a high conversion of revenue to profit and cash flow. Net cash flow from operations was $46.4 million in the quarter. We delivered these strong profit and cash flow results even as we invested in new player acquisition activities at SuperNation, specifically in support of its recently launched first iGaming brand, Las Vegas, which has met with a strong player response. Our social casino segment remains the primary engine of Double Down's profit and cash flow generation. In the first quarter, social casino revenue grew 9.5% year-over-year to $76.9 million, driven by the contribution from WoW Games, which was acquired in the third quarter of last year. The direct-to-consumer or DTC aspect of our social casino business remains a driving force behind our continued strong profitability. As mentioned on our last conference call wow games already benefits from a relatively large dtc component due to its strong web-based history and over the last few quarters we have made significant progress in ramping up dtc purchases made in our flagship social casino double down casino in the first quarter of 2026 This direct-to-consumer transition accelerated as the DTC component of double-down casino revenue exceeded 40%. As a result, DTC revenue in the first quarter was 44% of total social casino revenue, up sequentially from 33% in Q4 2025. We plan to remain focused on optimizing the contribution of DTC revenue as a percentage of our overall social casino revenue throughout 2026. Recognizing that the global social casino market is estimated to be in secular decline, our priorities in this business segment remain, precise execution of our product development initiatives around player and player retention, focus on marketing and live ops activities to maximize payer conversion and purchasing activity, and continued focus on the direct consumer transition. Turning to our iGaming business, SuperNation's Q1 2026 revenue was $17.2 million, an increase of 30% year-over-year, and up 6% from Q4 2025. The recent introduction of our first iGaming casino title, Las Vegas, contributed to the strong SuperNation results in the first quarter. Going forward, we look to leverage these early positive results as we continue to acquire new players through marketing and advertising investments. At SuperNation, we are also focused on continuing to find offsets to the recently introduced higher UK gambling test rates through product adjustments such as reducing bonusing rates. I am pleased to report the early results of this action to be positive. Our first quarter results highlight how prudent, targeted investments are uncovering growth opportunities while sustaining our track record of strong profitability and cash flow generation. We are successfully integrating acquisitions and optimizing our core double-down business. M&A remains a strategic priority as we evaluate opportunities in online gaming and mobile entertainment to drive long-term shareholder value. Now I will turn the call over to our CFO, Joe Sigrid, to walk us through the financials before providing my closing remarks. Joe?

Thank you, IK, and good afternoon, everyone. To review, revenues for the first quarter of 2026 were $94.1 million. This compares to total company revenues of $83.5 million in the first quarter of 2025. Our social casino segment grew approximately 9% from the first quarter of 2025 to $76.9 million, boosted by the inclusion of revenue from WoW Games. As you'll recall, the WoW Games acquisition closed in July of last year. iGaming revenues grew by $4 million, or 30% year-over-year, to $17.2 million, and was up over $1 million from Q4 2025. Regarding our overall social casino KPIs, we mentioned last quarter that the metrics from WoW Games are somewhat different from those from Double Down Casino. Specifically, the WoW Games business experiences a higher payer conversion rate and lower average monthly revenue per payer. With this in mind, overall Social Casino KPI highlights for the first quarter include the payer conversion rate, which is the percentage of players who pay within the Social Casino apps increased to 9.7% in Q1 2026 compared to 6.9% in Q1 2025. The average revenue per daily active user, or ARCDAO, of $1.34 up from $1.29 in Q1 2025. And an average monthly revenue per payer at $207 in Q1 2026, down from $276 in the prior year period. In the first quarter of 2026, operating expenses were $58.7 million compared to $53.9 million in the first quarter of 2025. The increase is primarily due to the addition of WoW Games expenses. Sales and marketing expenses for the first quarter of 2026 were $17.4 million compared to $14.1 million in the first quarter of 2025, which again did not include WoW games. In addition, and as IK mentioned earlier, in Q1, we invested to acquire new players for SuperNation's recently announced fourth brand. And in the first quarter, we also saw an opportunity to increase advertising investment in Double Down Casino based on recent positive ROI trends. Profit excluding non-controlling interest for the first quarter of 2026 increased 48% to $35.4 million or earnings per fully diluted common share of $14.28 or $0.71 per American depository share in the first quarter of 2026, compared to profit for the interim period of $23.8 million or earnings per fully diluted share of $9.62, $0.48 per ADS in Q1 of 2025. The increase primarily reflects higher revenue and higher unrealized gain on foreign currency, partially offset by higher overall operating expenses, which was primarily due to the inclusion of wild games and increased costs associated with revenue growth from SuperNation. Adjusted EBITDA for the first quarter of 2026 rose to $38.2 million compared to $30.8 million for the first quarter of 2025 and $40.6 million for Q4 2025. Adjusted The EBITDA margin was 40.6% for Q1-2026 as compared to 36.9% in Q1-2025 and 42.4% in Q4-2025. Net cash flows provided by operating activities in Q1 2026 were $46.4 million compared to $41.1 million in Q1 2025 due to higher profit and lower income tax pay. Inclusion of Q1-2026 meaningful cash generation, we had $533.4 million in cash, cash equivalents, and short-term investments with a net cash position on March 31st, 2026 of approximately $500 million or approximately $10.10 per ADS. Now I'll turn the call back to IK for closing remarks.

Thank you, Joe. Double Down Interactive, powered by our core social casino and iGaming segments, delivered another quarter of strong profitability and cash flow. Building on this solid start to 2026, we remain committed to the innovation and discipline high ROI investments and to drive DTC revenues to optimize social casino margins. Finally, our strong balance sheet and cash position provide the flexibility to pursue strategic M&A, a core pillar of our strategy to enhance long-term shareholder value. We are now happy to take your questions, Zutip.

Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone. To remove yourself from the queue, you may press star 11 again. Please stand by while we compile the Q&A roster. Our first question It comes from the line of David Bain of Texas Capital Bank. Your line is open, David.

And I did read the press release where you're sort of not going to be answering too much around the W expression of interest. With that being stated, though, rather than asking about, you know, voter outcome potential or some of the nuances with that offer, Is there any way you could help shareholders or potential ones or us just to review the process and kind of the structure, the related structure with it from here? Just any detail around that would be helpful. You know, this independent committee who may be on it, you know, the timing of some of the voting logistics, anything that you think you could share would be helpful.

Yeah, Dave. I mean, it is really not possible to say anything more than what's already been publicly disclosed. As you know, we formed a special committee. The board voted to form a special committee of independent disinterested directors just after receiving the proposal. And, you know, their objective is to review, evaluate and determine the next steps that would be in the interests of the company and its unaffiliated shareholders. Other than that, you know, there's not anything else the company can comment on.

OK, I understand. And then, I guess, let me just add two fundamental ones, because that one I didn't get much. The incremental, or the increased visibility into SuperNation EBITDA contribution, you know, this time around relative to last time. Are we seeing, you know, the endpoint on that inflection broadly, you know, this year? And are we sort of still break even with that business line?

Yeah, yeah, great question. So as you know, we've been looking to get beyond break even with SuperNation since we purchased them. And by the way, SuperNation had a very strong quarter. And so with Q1 not yet including the increased tax burden from the increase in the UK, we saw that they actually were able to reach a break even and even turn a bit of a profit. The tailwind of the growth of the business, the fourth brand that was recently launched, you know, all were very positive. Of course, the headwind now, if you will, starting April 1, is the increased UK tax amount. Um, but as, uh, as IK mentioned, you know, some of the actions that we're taking, um, have been, um, at least so far early, early days, uh, looking, looking good as it relates to trying to kind of mitigate some of the, the, the expenses, uh, on, on the business. And so it's a little too early to tell just based on the fact that we're only a little over a month into the new tax regimen. But, you know, we're still very, very focused on getting that business to be profitable and to grow the profit over time.

Okay, awesome. And then if I could just have a more follow-up, just, you know, and you did mention, Joe, the KPI nuances between WOW and DDI, Double Down Interactive. But, you know, if you could bifurcate perhaps D2C growth or the mix with the two, I mean, we're getting here at like, you know, 44%. You know, we were kind of 20 plus percent, I would think, by now with DDI. You know, can we get – can you help us like – can we get to 50% plus? I'm trying to understand where we are, you know, inning-wise with D2C as a full company.

Well, I think, as I believe Ike mentioned, DDI traditional, if I can use that word, it's called Double Down Casino, by itself was over 40% in Q1. So the growth essentially sequential from 33 percent DTC total in Social Casino last in Q4 to 44 in 44 percent in Q1 in one quarter, going from 33 to 44 percent was primarily based on the growth of DTC and Double Down Casino. You know, it's a great question. You know, how far can it go? How far further can it go both with traditional DDI as well as wow? It's hard to predict. I mean, we've made incredible progress over the last, you know, two years and it's hard to handicap it.

But but, you know, we're really pleased with the results so far. okay great thanks guys thank you our next question comes from the line of eric handler of roth capital your line is open eric thank you very much um here i'm going to beat the uh uh the the horse to death here with with the uh question on on the w offer um but But when you look at potential acquisitions, is that on hold for the moment until the offer has been evaluated? Are you still actively looking for potential deals?

Yeah. Thanks, Eric. Well, I mean, from an operating the company perspective, the management team here at Double Down continues to operate business as usual. And so we are continuing not only to run the current businesses we have, but to evaluate and analyze M&A opportunities, because that's certainly been a big part of what we've been focused on. And so, you know, it's a big part of our growth strategy. And so we're continuing to, you know, to look at opportunities.

Okay. And then as a follow-up, so you did give a little bit of comment on, you know, the higher UK casino tax or iGaming tax. What are you doing to sort of mitigate the impact? Are you passing some of that along to the consumer? And what's happening to user acquisition costs with this in the last, I guess, 40 days?

Yeah. So, IK, if you'd like, I'll talk a little bit about CPI, user acquisition costs. If you want to talk a little bit about what we're doing to counteract the, you know, the headwind of the tax increase, feel free. I mean, as it relates to CPIs, you know, there has been, I think, moderation in the expense. I don't know if it's been reduced significantly, but certainly some of the increases that we saw, not only in the iGaming space, but also in gaming as a whole, I'll say. I mentioned that we leaned in a bit more even on the social casino side with Double Down Casino in the last quarter. quarter, you know, we're seeing some opportunities for us to, you know, to spend more. And so that's, you know, that's been positive. Relative to the situation with iGaming in the UK, it's still very early days. We're very keen to continue to observe what our much larger competitors are doing in that space. But, you know, we certainly are, you know, being, trying to be as flexible as we can because we are still, as I mentioned earlier, very focused on getting the profitability up on the iGaming business. Ike, do you want to talk a little bit about some of the things we're doing on SuperNation?

Yeah, on the marketing operational side, we actually leveraged real-time data analytics to optimize user acquisition costs and enhanced retention. And while we are mindful of the evolving regulatory and tax landscape in the UK side, we are seeing the decreasing CPI cost, but it will depend on the budget side. So our strategy is just to mitigate these patterns through a portfolio expansion. And I think we are testing the ramping up right now. So it's all to say, but, yeah, it will go better.

Thanks, Eric. Thank you. Our next question comes from the line of Aaron Lee of Macquarie. Your question, please, Aaron.

Hey, good afternoon. Thanks for taking my question. And maybe to start just building off the earlier question on M&A, can you just update us on what the M&A environment looks like today? Are you still seeing deals across your desk? And what's been the gating factor so far? Are these deals just too small to move the needle or are seller expectations misaligned? Any color on the M&A picture would be helpful.

Yeah, sure, Aaron. Thanks a lot. Yeah, I mean, there are still deals out there. I mean, it's clear that valuation expectations, as we've discussed in the past or the more recent past, are are are down, you know, which as a buyer is is is good. And, you know, there are a number of deals that are that are also smaller. Aaron, to your point, which, you know, for us, you know, we've been looking to to continue to ratchet up. I mean, our first deal with SuperNation spent 30, 40 million dollars. Our next deal was WOW spent, you know, 65 million and added, you know, you know, something on the on the order of 40 to 50 million in annual revenue. And so the next deal is also looking to be a step up, we would we would expect. But, you know, it's it's hard to predict when that'll happen. There are deals out there. And, you know, we're continuing to use our disciplined approach to analyzing them. And, yeah, you know, we're on the look. OK, thanks for that.

And I also wanted to ask about your comment about the opportunity you saw during the quarter to increase the advertising investment in Double Down Casino. Is there any more detail you can provide on what you saw in the market as you move through the quarter? And do you have visibility into whether those trends are sustainable in the coming quarters?

Yeah, no, you know, good question. We were pleased to see that, as I think also mentioned, the CPIs had, you know, looked a little better for us, a little lower in Q1. Q4 is always a pretty tough environment. So there's always a Q4 to Q1 improvement. But that coupled with our, I mean, it's the ROI that's the most important, right? Can you monetize quickly in the new player acquisition? And we were able to see that. So not only was there good news on the CPI side, but we were also able to translate that into payer engagement. And so that's why we spent not a ton more, but a bit more. And certainly we're always glad to do that. As far as whether it's sustainable or not, it's very difficult to tell. But, again, you know, as we've talked in the past, we analyze the cohorts that we acquire, new player cohorts that we acquire on a, you know, daily, weekly basis. And so we're always looking to lean in to acquiring new players if we can.

Awesome. Thanks, Joe.

Yep. Thanks, Aaron.

Thank you. Once again, to ask a question, please press star one one on your telephone. Again, that's star11 on your telephone to ask a question. Our next question comes from the line of Josh Nicholas of B. Riley. Your line is open, Josh.

Yeah, thanks for taking my question. Just to touch on the social casino business, we've seen some improvement there. What was the organic growth rate? ex-Wow. I'm just curious how we should be thinking about that trajectory as we lap the Wow acquisition in July and move into the second half.

Yeah, I mean, certainly, as mentioned earlier, you know, social casino is a very mature category, and it's estimated to be in secular decline. So there's no question that there's a, you know, a headwind when it comes to trying to grow the existing business, whether it be Double Down Casino or Wow. But if you look at our results compared to what EILERS, for instance, estimates, we think we did more than hold our own in the first quarter. But there's no question, given the maturity of this category, it's still incredibly the cash generative, incredibly profitable. But, you know, given the maturity of the category, you know, that's why our strategy is also focused on, well, optimizing profitability, as we've talked about through DTC and leaning into opportunities to grow as we can relative to acquiring new players when the ROI makes sense. And then obviously, as a company looking for, you know, M&A opportunities to continue to expand the top line.

Thanks. Last question for me. I mean, there's been a couple of questions on, obviously. Wouldn't expect you to comment on the proposal itself, but anything you could say about the timing around forming a special committee or this could reach a decision?

Well, the special committee has been formed. I mean, we sent out a press release a couple of weeks ago on that. And so they're, you know, they've been enabled to do their job. And as far as the process or the timeline, it's not something that we have exposure to at the company. Got it. Thank you. Thanks. Thanks, Josh.

Thank you. That does conclude the Q&A portion of our call and our conference for today. Thank you for participating. You may now disconnect.