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Doubledown Interactive Co., Ltd. (DDI)
:DDI
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Doubledown Interactive Co
(NASDAQ:DDI)
Rating:75Outperform
Price Target:―
Positive Factors
Cash Flow
The company has built a strong cash flow machine with a free cash flow conversion of nearly 100% of adjusted EBITDA, which could lead to strategic capital deployment opportunities.
Monetization
The company’s ability to monetize its base, converting nearly 7% of its active users into active payers, is impressive, tracking at over 3x the industry average.
Strategic Positioning
With a well-established and ever-expanding European presence and expertise in social casino games, DoubleDown should be able to hit the ground running should RMG be allowed by U.S. states.
Valuation
DoubleDown Interactive is seen as an attractive special situation with the potential for a significant value unlock due to its cash position and valuation being well below its peers.
Negative Factors
Market Competition
DoubleDown is executing well against a temporarily declining user base, with plenty of competition in the social casino space, as it grows its real-money gaming business, and as it looks to expand into other casual games.
Social Casino Operation
The mature Social Casino operation is forecast to decline at a 5%-6% CAGR through 2027, though it remains a stable cash flow business.
Doubledown Interactive Co (DDI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$482.65M
Dividend YieldN/A
Average Volume (3M)74.67K
Price to Earnings (P/E)4.1
Beta (1Y)0.53
Revenue Growth10.71%
EPS Growth21.74%
CountryUS
Employees190
SectorCommunication Services
Sector Strength73
IndustryElectronic Gaming & Multimedia
Share Statistics
EPS (TTM)9.62
Shares Outstanding49,553,440
10 Day Avg. Volume47,477
30 Day Avg. Volume74,674
Financial Highlights & Ratios
PEG Ratio-0.83
Price to Book (P/B)0.58
Price to Sales (P/S)0.00
P/FCF Ratio3.28
Enterprise Value/Market Cap0.36
Enterprise Value/Revenue0.13
Enterprise Value/Gross Profit0.68
Enterprise Value/Ebitda0.29
Forecast
1Y Price Target
$19.40Price Target Upside99.18% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Doubledown Interactive Co Business Overview & Revenue Model
Company DescriptionDoubledown Interactive Co (DDI) is a leading developer and publisher of digital games, primarily focusing on the social casino gaming sector. The company is known for its flagship product, DoubleDown Casino, which provides players with a virtual casino experience featuring a variety of slot machines, poker, and other classic casino games. DDI operates primarily in the mobile gaming and social media platforms, offering users engaging and interactive gaming experiences.
How the Company Makes MoneyDoubledown Interactive Co generates revenue primarily through the sale of virtual currency within its games. Players purchase these in-game currencies to enhance their gaming experience, allowing them to play longer or access special features. The company's freemium model attracts a wide user base who can play for free but are incentivized to make in-app purchases for additional benefits. Key revenue streams include microtransactions, in-game advertisements, and partnerships with social media and mobile platforms to reach a broader audience. Additionally, the company may benefit from collaborations with other gaming developers and platforms to expand its market presence and introduce new games.
Doubledown Interactive Co Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q1-2025)
| % Change Since: -4.51%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment with significant growth in iGaming revenues and cash flow improvements being overshadowed by challenges in Social Casino revenue declines and increased user acquisition costs. Despite strong monetization metrics, the company faces competitive pressures and difficulties in launching new games.Q1-2025 Updates
Positive Updates
Strong iGaming Revenue Growth
SuperNation iGaming revenues increased by 59% year-over-year, reaching $13.2 million, the highest quarterly performance since acquisition.
Increased Cash Flow from Operations
Cash flow from operations in Q1 2025 was $41.1 million, up more than $5 million from Q1 2024.
Improved Monetization Metrics
ARPDAU increased to $1.29 from $1.26, and payer conversion rate increased to 6.9% from 6.4% year-over-year.
Strong Cash Position
DoubleDown maintains a net cash position of approximately $422 million as of March 31, 2025.
Negative Updates
Decline in Social Casino Revenue
Social Casino revenues declined by 12% year-over-year, impacted by strong performance in the prior year.
Challenges with New Game Launch
Decision not to move forward with the commercial launch of a new match-three game after extensive testing.
Increased User Acquisition Costs
User acquisition costs have risen, attributed to large investments by sweepstakes games publishers.
Company Guidance
During DoubleDown Interactive's first quarter earnings call for fiscal year 2025, management provided key financial metrics and guidance. The company reported consolidated revenue of $83.5 million and an adjusted EBITDA of $30.8 million. The Social Casino segment contributed $70.3 million, while the iGaming business, SuperNation, generated $13.2 million, marking the highest quarterly revenue for SuperNation since its acquisition in late 2023. Despite a year-over-year revenue decline in the Social Casino segment by 12%, the company achieved strong performance in monetization KPIs, with an increase in ARPDAU to $1.29 and payer conversion rate rising to 6.9%. Cash flow from operations rose to $41.1 million, up from $35.7 million in Q1 2024. The company highlighted a focus on maintaining strong cash flow conversion and profitability, with an emphasis on expanding direct-to-consumer revenue in the Social Casino business to exceed 15% in 2025. Additionally, DoubleDown expressed confidence in further scaling SuperNation within existing markets and exploring expansion into other regulated European iGaming markets, while also actively seeking potential acquisitions to diversify revenue sources.Doubledown Interactive Co Financial Statement Overview
Summary
Doubledown Interactive Co demonstrates strong financial performance. The company has shown robust profitability with a net profit margin of 36.3% and effective cash flow management, boasting a free cash flow growth rate of 416.9% from 2023 to 2024. The balance sheet is solid with low leverage, although there is a concern over the decrease in total assets.Income Statement
Doubledown Interactive Co shows strong profitability with a consistent increase in net income and EBIT margins over recent years. The 2024 figures highlight a gross profit margin of 69.7% and a net profit margin of 36.3%, both indicating robust profitability. The revenue growth rate from 2023 to 2024 was 10.5%, showcasing a healthy upward trend. However, past fluctuations in revenue and profit margins indicate some degree of volatility.85
Very Positive
Balance Sheet
The company maintains a solid balance sheet with a low debt-to-equity ratio of 0.05 in 2024, reflecting conservative leverage. The equity ratio stands strong at 92.9%, indicating a high level of financial stability. However, the company has shown a decrease in total assets over time, which could signal potential risks if this trend continues.78
Positive
Cash Flow
The cash flow statement reveals impressive improvements, with a remarkable free cash flow growth rate of 416.9% from 2023 to 2024. The operating cash flow to net income ratio of 1.20 suggests efficient cash generation from operations. Free cash flow consistently exceeds net income, highlighting strong cash flow management. These factors contribute to a robust cash position, enhancing financial flexibility.88
Very Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 341.33M | 308.86M | 321.03M | 363.20M | 358.34M |
| Gross Profit | 237.79M | 282.93M | 211.72M | 236.59M | 232.09M |
| EBITDA | 170.01M | 136.72M | -263.64M | 120.54M | 117.58M |
| Net Income | 124.02M | 100.89M | -233.98M | 78.11M | 53.62M |
Balance Sheet | |||||
| Total Assets | 906.16M | 803.34M | 792.05M | 969.92M | 806.83M |
| Cash, Cash Equivalents and Short-Term Investments | 414.85M | 274.99M | 285.24M | 242.06M | 63.19M |
| Total Debt | 38.69M | 46.35M | 44.13M | 49.94M | 56.82M |
| Total Liabilities | 68.82M | 75.45M | 165.83M | 105.93M | 107.32M |
| Stockholders Equity | 841.91M | 727.73M | 626.23M | 863.99M | 699.51M |
Cash Flow | |||||
| Free Cash Flow | 147.56M | 28.53M | 50.52M | 94.30M | 99.63M |
| Operating Cash Flow | 148.45M | 28.71M | 50.79M | 96.11M | 99.85M |
| Investing Cash Flow | -15.61M | -30.27M | -67.83M | -1.81M | -2.17M |
| Financing Cash Flow | -2.01M | 0.00 | -2.91M | 86.04M | -76.27M |
Doubledown Interactive Co Technical Analysis
Negative
9.74
Price Trends
9.79
Negative
9.83
Negative
11.07
Negative
Market Momentum
0.02
Positive
48.61
Neutral
11.57
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DDI, the sentiment is Negative. The current price of 9.74 is below the 20-day moving average (MA) of 9.83, below the 50-day MA of 9.79, and below the 200-day MA of 11.07, indicating a bearish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 48.61 is Neutral, neither overbought nor oversold. The STOCH value of 11.57 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DDI.
Doubledown Interactive Co Risk Analysis
Doubledown Interactive Co disclosed 54 risk factors in its most recent earnings report. Doubledown Interactive Co reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 2 New Risks
1.
There can be no assurance that the adoption of the International Financial Reporting Standards, or IFRS, will not adversely affect our reported results of operations or financial condition. Q4, 2023
2.
Failure to comply with regulatory requirements in a particular jurisdiction, or the failure to successfully obtain a license or permit applied for in a particular jurisdiction, could impact SuprNation's ability to comply with licensing and regulatory requirements in other jurisdictions, or could cause the rejection of license applications or cancellation of existing licenses in other jurisdictions, or could cause financial institutions, online and mobile platforms, advertisers and distributors to stop providing services to Supernation which it relies upon to receive payments from, or distribute amounts to, its users, or otherwise to deliver and promote our product offerings and services. Q4, 2023
Doubledown Interactive Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $435.63M | 7.59 | 14.97% | ― | -33.83% | -38.30% | |
75 Outperform | $482.65M | 4.11 | 13.91% | ― | 10.71% | 21.74% | |
67 Neutral | $925.38M | 54.52 | 4.85% | ― | 10.41% | 122.27% | |
62 Neutral | $42.09B | -1.57 | -12.06% | 2.81% | 2.10% | -71.01% | |
59 Neutral | $520.48M | ― | -51.21% | ― | -14.71% | 66.24% | |
56 Neutral | $351.14M | 25.25 | -1.00% | ― | 0.82% | -102.72% | |
56 Neutral | $153.59M | ― | -11.64% | ― | -11.11% | -90.96% |
* Communication Services Sector Average
Performance Comparison
DDI
Doubledown Interactive Co
9.74
-1.80
-15.60%
GRVY
Gravity Co
62.69
-15.80
-20.13%
FVRR
Fiverr International
25.77
3.48
15.61%
THRY
Thryv Holdings
11.90
-7.60
-38.97%
SEAT
Vivid Seats
1.70
-3.28
-65.86%
MYPS
PLAYSTUDIOS
1.22
-0.85
-41.06%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.