DoubleDown Interactive (NASDAQ:DDI) Announces Earnings Results, Beats Expectations By $0.05 EPS

Key Points

• DoubleDown Interactive beat quarterly expectations, reporting EPS of $0.66 versus the $0.61 consensus and revenue of $94.3 million versus estimates of $92.9 million.
• Q2 revenue rose 11% year over year, while adjusted EBITDA increased 17% to $39.3 million; operating cash flow reached $24.6 million and net cash stood at approximately $521.3 million.
• Direct-to-consumer sales climbed to a record 52% of social casino revenue, supporting profitability, while the company continues reviewing DoubleU Games’ non-binding $11.25-per-ADS acquisition proposal.

DoubleDown Interactive (NASDAQ:DDI - Get Free Report) released its quarterly earnings data on Tuesday. The company reported $0.66 EPS for the quarter, beating the consensus estimate of $0.61 by $0.05, FiscalAI reports. DoubleDown Interactive had a net margin of 30.77% and a return on equity of 12.16%. The business had revenue of $94.29 million during the quarter, compared to analyst estimates of $92.90 million.

Here are the key takeaways from DoubleDown Interactive's conference call:

• DoubleDown reported Q2 revenue of $94.3 million, up 11% year over year, while adjusted EBITDA rose 17% to $39.3 million and the margin expanded to 41.6%.
• Cash generation remained strong, with operating cash flow increasing 25% year over year to $24.6 million in the quarter and reaching $71 million for the first half; the company ended June with approximately $521.3 million in net cash.
• Direct-to-consumer sales reached a record 52% of social casino revenue, up from 44% in Q1 and just over 15% a year earlier, supporting profitability by reducing platform fees. Management said it expects further DTC growth through investments in owned channels, CRM, and payment infrastructure.
• SuprNation’s iGaming revenue grew 10% year over year to $17 million, but the higher U.K. gambling tax led the company to reduce player-acquisition spending and moderate sequential growth. Management said product, marketing, and expense adjustments have largely mitigated the tax impact and expects company-wide marketing spending to remain near its recent run rate.
• The special committee continues to evaluate DoubleU Games’ non-binding $11.25-per-ADS cash proposal to acquire unaffiliated shares, but management provided no update or expected timeline for a decision.

DoubleDown Interactive Trading Up 2.7%

Shares of DDI traded up $0.32 during trading hours on Tuesday, reaching $12.37. 154,396 shares of the company traded hands, compared to its average volume of 99,822. The stock's fifty day moving average price is $11.52 and its 200 day moving average price is $10.21. The firm has a market cap of $612.93 million, a price-to-earnings ratio of 5.38 and a beta of 1.02. DoubleDown Interactive has a 12-month low of $8.10 and a 12-month high of $12.50.

Analysts Set New Price Targets

A number of brokerages recently commented on DDI. Freedom Capital downgraded shares of DoubleDown Interactive from a "strong-buy" rating to a "hold" rating in a report on Tuesday, April 28th. Wall Street Zen raised DoubleDown Interactive from a "hold" rating to a "buy" rating in a research note on Saturday, May 16th. Weiss Ratings upgraded DoubleDown Interactive from a "hold (c-)" rating to a "hold (c)" rating in a report on Wednesday, May 13th. Finally, Wedbush cut their price target on shares of DoubleDown Interactive from $21.00 to $15.00 and set an "outperform" rating on the stock in a report on Wednesday, May 13th. One equities research analyst has rated the stock with a Buy rating and three have issued a Hold rating to the company. According to MarketBeat.com, DoubleDown Interactive presently has an average rating of "Hold" and an average target price of $15.50.

Institutional Investors Weigh In On DoubleDown Interactive

A number of institutional investors and hedge funds have recently added to or reduced their stakes in DDI. Ameriprise Financial Inc. increased its position in DoubleDown Interactive by 130.2% during the 2nd quarter. Ameriprise Financial Inc. now owns 1,231,132 shares of the company's stock valued at $11,782,000 after purchasing an additional 696,366 shares during the period. Hudson Bay Capital Management LP bought a new stake in DoubleDown Interactive during the 2nd quarter valued at $5,759,000. Stonehill Capital Management LLC increased its holdings in shares of DoubleDown Interactive by 49.1% in the 3rd quarter. Stonehill Capital Management LLC now owns 190,605 shares of the company's stock valued at $1,780,000 after acquiring an additional 62,735 shares during the period. Millennium Management LLC lifted its stake in shares of DoubleDown Interactive by 100.2% during the 3rd quarter. Millennium Management LLC now owns 116,677 shares of the company's stock worth $1,090,000 after purchasing an additional 58,395 shares during the last quarter. Finally, Citadel Advisors LLC lifted its stake in shares of DoubleDown Interactive by 261.4% during the 3rd quarter. Citadel Advisors LLC now owns 60,163 shares of the company's stock worth $562,000 after purchasing an additional 43,517 shares during the last quarter.

About DoubleDown Interactive

DoubleDown Interactive NASDAQ: DDI is a digital entertainment company that specializes in the development and publishing of social casino games. The company's portfolio centers around free-to-play titles that emulate the experience of land-based casino games such as slots, video poker, bingo and table games. By blending high-quality graphics, engaging gameplay features and real-time social mechanics, DoubleDown Interactive aims to deliver a virtual casino environment accessible via web, mobile and social media platforms.

The company's flagship offering, DoubleDown Casino, serves as a hub for multiple slot and table-style games, enabling millions of registered players to compete in tournaments, unlock new machines and purchase virtual coins through in-app transactions.

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