Social casino specialist DoubleDown Interactive is considering new acquisition opportunities following its entry into real-money gaming with SuprNation, but maintains that it is not transforming into solely an igaming company.
Acquired for $36.5 million in November last year, the SuprNation deal marked DoubleDown’s expansion into real-money gaming. Q2 was the second full quarter that SuprNation was integrated into the business.
For the three months ending June 30, group revenue increased 17.3% year-on-year to $88.2 million (£68.9m/€80.7m). SuprNation contributed $7.9 million in Q2, though this was a 4.8% decrease quarter-over-quarter. Revenue from social gaming alone reached $80.3 million in the second quarter, a 6.7% increase from Q2 2023.
The real-money brand holds licenses in Malta, Sweden, the Isle of Man, and Great Britain, and operates sites such as VoodooDreams, NYSpinz, and Duelz across Western Europe.
Potential for More M&A Activity
During DoubleDown’s Q2 earnings call, CFO Joseph Sigrist hinted at potential future M&A activity in both the igaming and social casino sectors, emphasizing the company’s commitment to remaining diversified.
“We continue to look at opportunities across those categories and more in some of the non-casino oriented mobile gaming categories,” Sigrist said. “There are categories where we have been active in the past that remain very large and have significant payer potential.
“When we announced the acquisition of SuprNation, we expressed our excitement about igaming but reiterated that we are not turning solely into an igaming company.”
Average revenue per daily active user (ARPDAU) increased from $1.04 to $1.33, and average monthly revenue per player rose from $235 to $288, despite a 23.0% decline in average MAUs and a 16.3% drop in average daily players.
DoubleDown CEO Keuk Kim indicated that further growth in monetization would be a key factor in assessing future M&A opportunities, aiming to strengthen the company’s balance sheet.
Rising Real-Money Gaming Costs and Q2 Profit Growth
Operating expenses in Q2 were 9.0% higher at $52.0 million, primarily due to SuprNation’s operations.
However, revenue growth led to a 31.6% increase in operating profit, reaching $36.2 million. DoubleDown also benefitted from $6.4 million in additional income from foreign currency transactions and interest income, with adjusted EBITDA rising 34.1% to $37.0 million.
This resulted in a pre-tax profit increase of 33.5%, totaling $42.6 million. After paying $9.4 million in taxes, deducting $88,000 in net profit from non-controlling interests, and accounting for a $2.1 million foreign currency loss, DoubleDown ended Q2 with a net profit of $31.1 million, up 28.5% year-on-year.
First Half Revenue Up 15.5%
For the first half of the year, the SuprNation deal resulted in similar trends. Revenue increased by 15.5% to $176.4 million.
Operating costs rose by 9.2% to $109.1 million, while operating profit climbed 27.0% to $67.2 million. Including $13.7 million in other income, pre-tax profit was $81.0 million, up 30.0%.
After paying $17.4 million in taxes, removing $141,000 in profit from non-controlling interests, and accounting for a $5.1 million foreign currency loss, the net profit stood at $58.5 million, a 25.5% increase, with adjusted EBITDA rising 30.0% to $68.9 million.