In its Q1 financial report, social casino developer DoubleDown Interactive recorded the first sequential revenue growth in eight quarters.
The "solid" Q1 results, according to Scout Gaming's Q2 DoubleDown, were due to the company's strong business model. The report highlighted the fact that Scout Gaming frequently achieved adjusted EBITDA margins of over 30% and had "significant" cash flow.
Keuk Kim, CEO, stated that the firm plans to concentrate on increasing player monetisation since the company's main social casino game, DoubleDown Casino, continues to reap the benefits of great player engagement. The creation of new casino-wide features will allow this to happen.
In its first quarter report, DoubleDown stated its intention to prioritise the future monetisation of players.
In addition, Kim dropped hints that the business will be branching out into new areas in the coming year.
The acquisition of SuprNation, which was previously disclosed, is anticipated to finalise later this year, and he said that they are also investing in expanding their business into new gaming categories like igaming.
Down year-on-year for DoubleDown in Q1
Revenue for the three months came in at $77.6 million, down 9.2 percent from $85.5 million in the first quarter of 2022. But compared to DoubleDown's Q42022 report of $76.2m, the results showed an improvement when looking at the results quarter-on-quarter.
The developer recorded $60.8 million in operational costs for the same period last year; this year, the business reported $52.2 million. This was a result of reduced marketing and amortisation costs, which DoubleDown attributed to falling sales and costs overall.
The company's 2022 financials were severely impacted by a $270.0m impairment charge.
Adjusted profits before interest, taxes, depreciation, or amortisation (EBITDA), which DoubleDown posted in the previous period, fell 5.6% from $26.9m. This decline was similarly minor. On the flip side, the adjusted EBITDA margin was up from 31.5% to 32.8%.
During the same period, the company reported reduced sales, which led to a fall in adjusted EBITDA. On the other hand, the improved margin was "primarily attributable" to a decrease in marketing spend.
There is "significant optionality" for businesses to allocate resources.
DoubleDown's average revenue per daily active user climbed to $1.03 from $0.97 in the first quarter of 2023, according to the company's internal metrics.
In the end, the company's profits rose over the year. In the first quarter of 2023, net income was $23.7m, up 28.1% from the previous quarter's total of $18.5m.
Upside-down Q1, the company dropped hints that it might be up to more mergers and acquisitions or investing.
Kim dropped hints that the firm was well-positioned for more mergers and acquisitions or investment activity.
Kim stated, "DoubleDown is positioned to deliver consistent attractive annual free cash flow" because to their efforts to improve their core social casino business.
With over $100 million in uncommitted capital, we have a solid balance sheet and a lot of leeway to use resources anyway we see fit to increase shareholder value.
"We are confident in our strategy and operational initiatives to maintain our strong performance throughout the remainder of 2023, and we are off to a great start to the year."
