Good afternoon, and welcome to DoubleDown Interactive Co., Ltd.'s earnings conference call for the fourth quarter ended 12/31/2025. My name is Sherry, and I will be your operator this afternoon. Prior to this call, DoubleDown Interactive Co., Ltd. issued its financial results for 2025 in a press release, a copy of which is available in the Investor section of the company's website at www.doubledowninteractive.com. You can find the link to the Investor Relations section at the top of the home page. Joining us on today's call are DoubleDown Interactive Co., Ltd. CEO, In Keuk Kim, and its CFO, Joseph A. Sigrist. Following their remarks, we will open the call for questions. Before we begin, Joseph Jaffoni, the company's Investor Relations Adviser, will make a brief introductory statement.

Thank you, Sherry. Before management begins their formal remarks, we need to remind everyone that some of management's comments today will be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and we hereby claim the protection of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements about future events and include expectations and projections, not present or historical facts, and can be identified by the use of words such as may, might, will, expect, assume, believe, intend, estimate, continue, should, anticipate, or other similar terms. Forward-looking statements include, and are not limited to, those regarding the company's future plans, merger and acquisition strategy, strategic and financial objectives, expected performance, and financial outlook. Forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially and adversely from what the company expects. Therefore, you should exercise caution in interpreting and relying on them. We refer you to DoubleDown Interactive Co., Ltd.'s annual report on Form 20-F filed with the Securities and Exchange Commission on 04/21/2025 and other SEC filings for a more detailed discussion of the risks that could impact future operating results and financial condition. These forward-looking statements are made only as of the date of today's call. The company does not undertake and expressly disclaims any obligation to update or alter the forward-looking statements whether as a result of new information, future events, or otherwise, except as required by law. During today's call, management will discuss non-IFRS financial measures which are believed by management to be useful in evaluating the company's operating performance. These measures should not be considered superior to, in isolation, or as a substitute for the financial results prepared in accordance with IFRS. A full reconciliation of these measures to the most directly comparable IFRS measure is available in the earnings release issued this afternoon. I would like to remind everyone that this call is being recorded and will be made available for replay via a link in the Investor Relations section at DoubleDown Interactive Co., Ltd.'s website. Thank you for your patience with that. It is now my pleasure to turn the call over to DoubleDown Interactive Co., Ltd.'s CEO, In Keuk Kim. Go ahead, please. Thank you, Joe. Good afternoon, everyone. We are delighted to be with you today.

To discuss our first quarter and full year 2025 results. Key highlights include continued year-over-year growth of SuperNation, the first full quarter contribution from Wow Games, the significant growth of our direct-to-consumer revenue stream, and continued strong profitability from our business model. We continue to demonstrate our ability to deliver strong adjusted EBITDA and drive high levels of cash flow, fundamental factors that we believe will continue to contribute to increased shareholder value. Let us start with the quarterly results. This afternoon, we reported first quarter consolidated revenue of $95,800,000, up 17% year over year, and adjusted EBITDA of $40,600,000, up 16% year over year. In Q4, we again delivered on our operating priorities to drive a high conversion of revenue to profit and cash flow. Net cash flow from operations was $42,600,000 in the quarter, bringing the total for full year 2025 to $136,800,000. We have continued to deliver these profit and cash flow results as we invested in new player acquisition activities at SuperNation. Our social casino business continues to be the engine of profit and cash flow generation for the company. In the first quarter, social casino revenue grew 9% year over year to $79,700,000, driven by our first full quarter of contribution from Wow Games. Wow Games benefits from broad payer engagement, which, as you can see, is reflected in our strong Q4 total social casino payer conversion rate of 9.6%. This is up from a conversion rate of 6.9% in Q4 2024. Conversely, Wow Games payers, on average, spend less than those from the traditional DoubleDown social casino business, resulting in lower total social casino monthly average revenue per payer of $198, as compared to $282 in Q4 2025. We have spent the last few months working closely with Wow Games and see operational and…

Thank you, IK, and good afternoon, everyone.

To review, revenues for 2025 were $95,800,000 and were comprised of $79,700,000 in revenues from our social casino business and $16,100,000 of revenues from SuperNation. This compares to total company revenues of $82,000,000 in 2024. Our social casino segment grew 9% from 2024 to the $79,700,000 level as we realized our first full quarter of Wow Games revenue. iGaming revenues grew 78% year over year to $16,100,000 and were essentially flat from Q3 2025 as we began moderating previous increases in spending to acquire new players. As we have done since acquiring the business, we closely monitor the projected ROI of the marketing investment in SuperNation and make adjustments as appropriate based on these projections. IK discussed the influence of Wow Games on our overall social casino which has helped increase the payer conversion rate while reducing the average monthly revenue per payer in 2025 as compared to Q4 2024. One reason for this dynamic is the greater proportional use of Android mobile devices versus Apple devices in Europe as compared to the US. Specifically, the payer conversion rate, which is the percentage of players who pay within the social casino apps, increased to 9.6% in Q4 2025 compared to 6.9% in Q4 2024. Average revenue per daily active user, or ARPDAU, of $1.35 was up from $1.30 in 2025.

And

average monthly revenue per payer was $198 in Q4 2025, down from $282 in the prior year period. In 2025, operating expenses were $59,000,000 compared to $47,800,000 in 2024. The increase is primarily due to impairment loss recognized for SuperNation's goodwill and increased operating expenses from the addition of Wow Games compared to the prior year period, partially offset by lower R&D expenses. Sales and marketing expenses for 2025 were $16,500,000 compared to $10,400,000 in 2024. In Q4, we optimized spending to acquire new players in DoubleDown Casino, invested in advertising spending for SuperNation to focus on new player acquisition, and absorbed a full quarter of marketing expenses at Wow Games for the first time. Profit excluding noncontrolling for 2025 decreased 31% to $24,700,000, or earnings per fully diluted common share of $9.72, $0.49 per ADS, in 2025 compared to profit for the interim period of $35,700,000, or earnings per fully diluted common share of $14.40, $0.72 per ADS, in 2024. The decrease primarily reflects the impairment loss on SuperNation goodwill. Looking beyond the impairment charge, adjusted EBITDA for 2025 rose to $40,500,000 compared to $35,300,000 for 2024 and $37,500,000 for Q3 2025. Adjusted EBITDA margin was 42.3% for Q4 2025 as compared to 42.8% in Q4 2024 and 39.1% in Q3 2025. Net cash flows provided by operating activities in Q4 2025 were $42,600,000 compared to $45,900,000 in Q4 2024. For all of 2025, despite a number of changes to our operations, we again generated significant free cash flow as net cash flows provided by operating activities of $136,800,000. With this meaningful generation of cash in 2025, we had $490,000,000 in cash, cash equivalents, and short-term investments, with a net cash position at 12/31/2025 of approximately $455,000,000, or approximately $9.19 per ADS. I will now turn the call back to IK for closing remarks.

Thank you, Joe. DoubleDown Interactive Co., Ltd. is delivering strong profit and cash flow from our two meaningful and exciting businesses, Social Casino and iGaming. In 2026, we are continuing to innovate and enhance these businesses through product, live operations, and marketing improvements. For example, we recently launched new meta features in DoubleDown Casino, including The Supreme Show, which gamifies the player opportunities to increase their purchase motivation. We are continuing to generate ways for players to further take advantage of DTC purchase options, thereby allowing us to further expand social casino margin. Our strong balance sheet and cash position allow us to make disciplined investment in each of our businesses while continually evaluating new opportunities to enhance the growth of each. This includes investments through both organic means as we leverage the strengths of our talented teams and through our evaluation of potential future acquisitions. We will now open for questions. Sherry?

Thank you. To ask a question, please press 1-1 on your telephone and wait for your name to be announced. To withdraw your question, press 1-1 again. Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster. Our first question will come from the line of David Bain with Texas Capital Bank. Your line is open.

Great. Thank you. IK and Joe, nice quarterly execution again. Maybe if you could help us bifurcate DoubleDown Casino and Wow revenue contribution and growth,

and I assume just based on the D2C mix,

Wow has a pretty high mix. Could you bifurcate DTC gains and mix for both Wow and DoubleDown as well?

Yes. Thanks, Dave. Appreciate that. Yeah. Going forward, we are going to, as we started in Q3, continue to formally report our KPIs and our revenue in the social casino sector and not specifically quantify Wow Games versus the traditional DoubleDown social casino business. But I can say that in both cases, the businesses held their own during the quarter. Certainly, as we continue to look at, for instance, the industry reports, we know that the social casino sector was down slightly in the year, in 2025. From a growth perspective, both entities of ours are working hard to grow in what is obviously a very mature category. Relative to DTC, yes. I definitely want to highlight two things. One, as you mentioned, the DTC element in Wow Games has always been quite high because many of their players actually still play through the website, whether it be on their phone or on their computers, and they historically have had a large non-app store contribution from their purchasers. At the same time, I do not want that to mask the really significant increase we saw on the traditional DoubleDown Casino side in ramping DTC. Obviously, from a pure size perspective, that is the largest contributor to our overall revenue and certainly was the largest contributor to the increase in our DTC results.

Awesome. Very helpful. And then my follow-up would be just, the leader of the social casino group announced some employee reductions recently, and they are going to rely more on AI and automation. One, can we get an update as to what DoubleDown and Wow, the combined company, is doing from that standpoint? And then if we look at the industry just from a bigger picture, and you see Aristocrat's recent divestiture of non-social casino assets, I do not know if they lean more into marketing. The question is, are you seeing the broader promotional landscape as rational, elevated, or even benign as revenue for the sector continues to be on the current growth trajectory? So two questions: one on AI and automation, and the other on promotions out there.

No. I will take the second one, and then I can talk about AI. Relative to the business, as this industry has matured, we have all had to deal with making our businesses more and more profitable. In fact, one of the things that I think we have been recognized for is, early on, not going crazy as it relates to overspending to acquire new players. We moderated our player acquisition spend back two, three years ago, and we have been staying very disciplined to our measuring systems and how we predict LTV, etcetera. As we look forward, social casino business is all about efficiency. Yes, it is about innovation. Yes, it is about doing everything we can to continue to acquire new players and get our players to be excited about playing and ultimately purchasing, and at the same time, becoming more and more efficient in all aspects of that business. To that end, AI is an important element. I will turn it over to IK. He can talk a bit about AI. Thank you, Joe. In that context.

Hi, David. AI is everywhere nowadays and already driving meaningful change across the broader technology and gaming industry, and DoubleDown Interactive Co., Ltd. is no exception. First, in content production, AI is helping us accelerate asset creation, localization, and early-stage prototyping. This shortens development cycles and improves our ability to test concepts and data features more efficiently. Second, in live operations, AI-driven analytics enable us to better personalize player experience, including offers, challenges, and engagement mechanics, based on behavior patterns and real-time data. Third, in marketing optimization, as Joe mentioned, AI enhances our audience targeting precision, creative iteration speed, and performance monitoring, supporting stronger ROI discipline. We are building these capabilities thoughtfully and responsibly, integrating AI into our workflows while maintaining strong creative and operational oversight. Overall, AI is not just about cost efficiency for us. It is about increasing speed, improving decision quality, and ultimately, enhancing returns across the business. Thank you.

Very helpful. Thank you.

One moment for our next question. That will come from the line of Aaron Lee with Macquarie. Your line is open.

Hey, thanks for taking my question. I guess on SuperNation,

believe you mentioned moderating the previous increases in customer acquisition spend. Is that just temporary, or is that signaling a shift more towards driving profitability? How should investors be thinking about the long-term margin structure of that business?

No. It is definitely, I guess, a reaction, if I could use that term, to what I mentioned earlier, which is staying true to our discipline relative to measuring the ROI of acquiring new players. As we have discussed for the past several quarters, we were able to really lean into marketing and acquiring new players in SuperNation without reaching the threshold of payback and ROI. More recently, we have started to bump up against the threshold where we have decided, at least on a sequential basis, to moderate the spend, or in a sense to moderate the increase, because we spent essentially the same amount from Q3 to Q4. We just did not increase it again. In 2026, it will be interesting to see. There are a number of changes going on. Many people understand that there are gaming tax changes specifically in the UK for online games. We will have to deal with that, and we will have to deal with what is, I think, an exciting opportunity as we further invest and lean into this fourth brand for SuperNation that we launched. We will have to continue to be mindful of our disciplined approach to spending marketing dollars.

Got it. That is helpful.

And then on direct-to-consumer,

yeah, really impressive results there. Nice growth with Wow Games, but you also mentioned on the traditional DoubleDown Casino side as well. Any updated thoughts on where this can go over the next few quarters? Thank you.

Yeah, I mean, I think

I will definitely speak for IK in saying that our ability to take advantage of DTC, again, Wow Games aside, just on our traditional business, has even been faster than we would have thought. I am not going to say what the limit of that is or what the plateau level will be, but we are not there yet for sure. We are going to continue to ramp DTC revenue as a percentage of our overall social casino revenue. That is what we are continuing to work on from a products and a messaging standpoint, in-app communications, and all the rest. As IK mentioned, we even have new things that we have already launched this quarter to take advantage of that.

That is great. Thank you so much.

One moment for our next question. That will come from the line of Eric Handler with Roth Capital. Your line is open.

Good afternoon. Thanks for the question.

So I know you get asked this question a lot, but I understand you are looking for acquisitions to grow the business.

But when you think about how much free cash flow you generate a year,

I mean, if you allocated 20% to capital returns, you would still have over $100,000,000, or $2 per share, to grow your existing cash base. You are definitely overcapitalized at this point. Is there any gating factor that is preventing you from either thinking about a buyback or a dividend? Or what are you waiting for, or is there something that would signal that you are ready to return capital?

Thanks, Eric. Thanks for the question. I would definitely reinforce the fact that long-term shareholder value and return to shareholders are topics that are top of mind for the company. They have been and continue to be. Management and the board and our controlling shareholder continue to discuss ways to create shareholder value. As you said, the results so far, at least up till now, has been a strong consensus that the way to create long-term shareholder value is through M&A strategy, dealing with the biggest challenge we have in the company, which is the very mature nature of the social casino business. That being said, there is not any particular trigger or any particular event that would say we can do more than that with our cash balance, other than the fact that it gets bigger and bigger, and we certainly are mindful of that. We certainly want to be sensitive to having such a large balance sheet. Not only do we continue to talk about long-term shareholder value and return to shareholders, we also continue to discuss ways that we can do more than one thing at a time with our strong balance sheet. As I said, those are always very present and very much in the minds of everybody who is associated with this company.

Okay.

And then as a follow-up, curious just from an accounting standpoint, has something changed at all with SuperNation that caused you to take an impairment charge?

We do evaluations of our

goodwill

and whether that be the original purchase of DoubleDown Casino, or the DoubleDown business, or the two acquisitions we have done, we do those at the end of the year or in the fourth quarter. You may recall that we did a very large goodwill write-down for the original DoubleDown acquisition two or three years ago. It was just that this is the time that we do it, and based on what the various third parties’ analysis was, that was the result. Obviously, it is non-cash. It does not affect EBITDA, and that was the outcome.

Okay. Thanks.

One moment for our next question. That will come from the line of Josh Nichols with B. Riley Securities. Your line is open.

Yeah, thanks for taking my question. I probably would echo the previous caller's notes about the company being

overcapitalized, but EV is negative at this point despite doing

$160+ million of annualized free cash flow, and

I appreciate the focus as you describe it for shareholder value, but I think by most people's definition, that would mean getting the stock price up and the EV to positive and ideally with the multiple. But to digress, looking at the iGaming piece of the business, it was essentially flat quarter over quarter. Clearly, I know you mentioned you have been optimizing the spending there, but how should we think as we model 2026 the dynamics between sequential growth versus profitability for that space? Is it clear to you what direction you are leaning, or are you going to be focusing more on growth or profitability going forward from here?

I am sorry, Josh, you said on the social casino business, right?

No. On the iGaming piece.

I understand. Like I said, it is really based on what we are seeing almost in real time. The biggest expense in the business, other than gambling tax, is marketing. It is acquiring new players. We have this disciplined approach to marketing and to spending to acquire players. I definitely believe that we are going to continue to spend to acquire players. The question is only going to be what level of increase we will make. We are not going to pull back on our spend. It is just a question of how much more, quarter to quarter, we will spend. Again, that goes back to the algorithms on the LTV and the payback period.

Thanks. And then just one follow-up from me. A lot has already been hit on AI, Wow, D2C. One thing I was curious about on the social casino side, given some of the legislative changes we are seeing in places like California, sweepstakes bans, are you seeing any easing of pressure in terms of marketing or customer acquisition cost on that front, or what is your expectation as we look forward to 2026 now that there has been some significant action taken by a number of states on that front?

That is a really good question, Josh. The really rapid rise of legislation on sweepstakes is really interesting. As I think we mentioned in past quarters, and some of our peers have as well, the pressure that the growth of sweeps had on marketing costs was significant. I would like to say that it has reverted back to some lower level, but one of the things that we learn over time is that the costs to acquire players, regardless of what sector of gaming, do not ever seem to go down. I think the increases that we saw during the period where sweeps were taking the country by storm, I think that pressure has lessened to a certain extent.

Appreciate it. Thanks.

One moment for our next question. That will come from the line of Eric Gregg with FTIA. Your line is open.

Thank you. I have two questions. First one, and

comment, seems like a pretty strong quarter, so congratulations on that. Joe, just going back on the impairment,

you did not do the SuperNation deal that long ago. I think the business is roughly double what it was when you bought it. What was the magnitude of the goodwill write-down? It seems surprising that any kind of goodwill write-down would need to happen when you have had such robust growth to the business. If you could help me understand that a little bit better.

It was around $8,000,000.

Yep.

We paid the upfront was $35,000,000 or so.

So that

gives you the relative size of it. To a great extent, we are driven in these cases by what the third-party valuation experts conclude, and that is where it ended up this year to address the goodwill balance.

So they are looking at comparables or something, or weighted average cost of capital? Was that the big driver?

I am not an expert, but I have obviously reviewed their report. They have a number of different ways they look at valuations, and that includes comparables and weighted average cost of capital and peers in both public and private markets, and a bunch of things.

The next question is really directed at IK. Joe, you gave some feedback on the capital allocation front. At this point, the company is trading at a negative enterprise value, and one could argue that is a referendum on the concern over the lack of savvy capital allocation policy or maybe about its current focus on its growth policy over taking advantage of this. It is hard to see how the company can buy any other business at a negative enterprise value, how it could do any other acquisition at a negative enterprise value. Buying in its own shares at negative enterprise value is incredibly compelling. IK, can you help us understand what is taking so long for management to come around to that thinking, or is this just a cultural issue that it is hard to get around, especially giving us more context given that W Games has been buying back stock? Help us understand all that.

If you do not mind, I will ask IK to answer as well, but I will do a preview here and say one of the things that has been really positive relative to buybacks is the activity that occurred last year through the sale of the private equity firm that helped buy DoubleDown in Korea, the sale of those shares, and the expansion of the public float. Just before IK makes his comment, I will say that definitely is something that was important relative to a buyback because it does not increase the float, and it makes us less concerned about us buying back and then making what was already a very small amount of float even smaller. IK, do you want to say anything about W and W’s strategy for buybacks? Oops. I cannot hear you there.

You hear me?

Now we can. Sorry.

Sorry. I cannot speak for W Games, but as long as I understand, W Games also pursue growth leveraging DoubleDown Interactive Co., Ltd.'s growth as well. They will take care of DoubleDown Interactive Co., Ltd.'s goals as well.

We are not just—okay. So it is growth at all costs regardless of whether it leads to negative enterprise value in the business. Is that what we should interpret that as?

I certainly would not interpret that from what IK said. I think what IK is saying is that, and let me try to fill in the blanks here—this has come up in the past where people point to W having done buybacks themselves. I do know for a fact that is not their primary strategy for their cash or their primary desire to deal with their fairly low enterprise value relative to the size of their company. It is similar to us in the sense that they are, again not speaking for them, focused on growth as well. Since we roll up to them, there is a desire for us to grow as well.

Thank you.

Thank you. This concludes our question and answer session. Thank you for joining us today for DoubleDown Interactive Co., Ltd.'s earnings call. You may now disconnect.