DDI Q1 2025: iGaming revenue up 60% to 13.2M; EBITDA breakeven nears
- SuperNation’s robust growth: The iGaming segment, led by SuperNation, delivered record quarterly revenues of $13.2 million with almost 60% year-over-year growth. This strong performance, enhanced by efficient marketing spend in key markets like the U.K. and Sweden, underpins a compelling growth story.
- Efficient marketing and product execution: Management highlighted exceptionally attractive returns on marketing investment, with rapid payback on new player acquisition and continued enhancements in product development across three distinct brands. This positions the company well to gain market share and scale profitably.
- Disciplined capital allocation: The company is taking a cautious, metrics-driven approach by not advancing projects that do not meet higher engagement and monetization thresholds (e.g., the match-3 game). This capital discipline and focus on high-margin products underscore a commitment to sustainable long-term profitability.
- Rising User Acquisition Costs: Executives noted that heightened competition—particularly from sweepstakes apps—has led to aggressive marketing pricing for social casino companies, which could impact margins and profitability.
- Weakening Social Casino Revenue Base: Q&A discussions highlighted a 12% year-over-year decline in social casino revenues in Q1 and expectations that tough comps may persist despite easing later in the year.
- Cautious New Product Pipeline: The decision to cancel the commercial launch of a new match-3 game and the disciplined approach to greenlighting new titles indicate potential challenges in developing successful new products, limiting future growth avenues.
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SuperNation Base
Q: Is the $13M quarter sustainable?
A: Management highlighted a record $13.2M for SuperNation, driven by strong new player acquisition particularly in the U.K. and Sweden, and they expect continued investment to further scale the business and build on this base. -
EBITDA Timeline
Q: When does profitability improve?
A: They are currently slightly below EBITDA breakeven in iGaming, but scaling the business is expected to eventually drive it toward EBITDA positive later in the year. -
M&A Update
Q: What’s the current M&A landscape?
A: Management noted a steady flow of opportunities across both free-to-play and iGaming, with growing name recognition likely to attract additional prospects in the near term. -
Social Casino Trends
Q: Will Q1's 12% decline ease?
A: Although Q1 was marked by a 12% decline due to tough comps, management expects comparison dynamics to improve in the second half of the year, even though real growth remains challenging. -
Acquisition Costs
Q: Are UA costs hurting legacy players?
A: Increased advertiser competition from sweepstakes apps has driven up new user acquisition costs, and while it’s hard to quantify any impact on legacy players, the pressure on UA costs is evident. -
Market Trends
Q: Do sports events impact user activity?
A: Management clarified that there are no dedicated sporting events driving acquisitions; rather, steady engagement with slot games in iGaming remains the core growth factor. -
Game Development
Q: Why cancel the match-3 launch?
A: A rigorous testing process showed the match-3 game didn’t meet their stringent thresholds for engagement and monetization. They remain focused on disciplined, metric-driven launches, leveraging AI-assisted development for future titles.