Q4 2023 DoubleDown Interactive Co Ltd Earnings Call

[music].

Operator: Good afternoon, and welcome to Double Down Interactive's earnings conference call for the fourth quarter and the year ended December 31st, 2023. My name is Josh, and I will be your operator this afternoon.

Good afternoon, and welcome to double down Interactive is earnings conference call for the fourth quarter and full year ended December 31st 2023. My name is Josh and I will be your operator. This afternoon. Prior to this call double down ish issued its financial results for the fourth quarter of two.

Operator: Prior to this call, Double Down issued its financial results for the fourth quarter of 2023 in a press release, a copy of which has been furnished in a report on Form 6K filed with the SEC and is available in the investor relations 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 homepage. Joining us on today's call are Double Down's CEO, Mr. Inkook Kim, and its CFO, Mr. Joe Sigrist. Following their remarks, we will open the call for questions. Before we begin, Richard Land, the company's outside investor relations advisor, will make a brief introductory statement. Mr. Land?

2023, and a press release, a copy of which has been furnished an airport on form 6K filed with the C. C. N is available in the Investor Relations section of the company's website at Www Dot W double down interactive Dotcom U.

Can find the link to the Investor Relations section at the top of the homepage joining us on today's call are double down CEO, Mr. <unk>, Kim and its CFO, Mr. Joe cigarettes.

Following their remarks, we will open the call for questions before we begin Richard land the company's outside Investor Relations adviser will make a brief introductory statement Mr land.

Richard Land: Thank you, Josh. Before management begins its 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, assume, believe, intend, estimate, continue, should, anticipate, or other similar terms. Such forward-looking statements include, but are not limited to, those regarding the company's future plans, mergers and acquisitions strategy, strategic and financial objectives, expected performance, and financial outlook. Such Therefore, you should exercise caution in interpreting and relying on them.

Yes.

Thank you Josh 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 27 of the Securities Act of 1933 as amended and section 21 that you have the Securities Exchange Act of 1934 as amended and we hereby claim the protection of the Safe Harbor provision.

So 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.

Excuse me.

And can be identified by the use of words, such as May might will expect assume belief intend estimate continue should anticipate or other similar terms.

Forward looking statements include but are not limited to.

Those regarding the company's future plans mergers and acquisition strategy strategic and financial objectives expected performance and financial outlook.

Okay.

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 double down in <unk> annual report on form 20-F filed with the SEC on March 31, 2023, and other SEC filings.

Richard Land: We refer you to Double Down's annual report on Form 20-F, followed by the SEC on March 31st, 2023, and other SEC filings for a more detailed discussion of the risks that could impact future operating results and financial conditions. These forward-looking statements are made only as of the date of this 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 accepted as required by law, during the call. Management will discuss non-GAAP measures, which I believe 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 financial results prepared in accordance with GAAP.

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 this 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 the call.

Management will discuss non-GAAP measures, which I believe by management to be useful in evaluating the company's operating performance.

These measures should not be considered superior to an isolation or as a substitute for the financial results prepared in accordance with GAAP. A full reconciliation of these measures to the most directly comparable GAAP measure is available in the earnings release and on and on our form 6K filed with the SEC prior to this call I.

Richard Land: A full reconciliation of these measures to the most directly comparable GAAP measure is available in the earnings release and on our Form 6K filed with the SEC prior to this call. 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 of Double Down's website. With that, it's now my pleasure to turn the call over to Double Down's CEO, In Kook Kim. Please go ahead, sir.

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 of double Downs website.

With that it's now my pleasure to turn the call over to double down C. E O in Cook Kim. Please go ahead Sir.

Thank you Richard.

Good afternoon, everyone. Thank you for joining us on our tiny tiny three first quarter earnings call.

Q4 revenue was $83 $1 billion, we had $78 million generated by our social casino free to play game and $4 $3 million coming from the operations up Super nation in the months of November and December.

Q4 revenue from our social casino free to play games was up nearly 8% on a quarterly sequential basis.

Up 3% compared to Q4 'twenty to 'twenty two.

In Kook Kim: Thank you, Richard. Good afternoon, everyone. Thank you for joining us on our 2023 first quarter earnings call. Total Q4 revenue was $83.1 million, with $78.8 million generated by our social casino and free-to-play games and $4.3 million coming from the operations of SuperNation in the months of November and December. The Q4 revenue from our social casino free-to-play games was up nearly 8% on a quarterly sequential basis and up 3% compared to Q4 2022. Logistic EBITDA for the first quarter rose both sequentially and year-over-year to $36.2 million, while cash flow from operations was $29.7 million.

Adjusted EBITDA for the first quarter it rose.

Sequentially and year over year, two sorry two.

$2 million, while cash flow from operations was $29 7 billion.

Our flagship social casino games double Docs, you know, we're a DTC continues to be the driver of our solid result at full year 2023, adjusted EBITDA, reaching nearly $119 million.

Cash flow from operations.

Our 2023 total year exceeded $116 billion, if according to find a best in class action settlement payment all year in the year.

We continue to generate year over year increases in our some of our most important kpis, including average monthly revenue per payer and payer conversion rate reaching.

Which indicate our great ability to offer a compelling entertainment value to our core payment players.

These results largely reflect per our plan.

The update is a player to make in that part of <unk> and.

The continued increase in the amounts paid by Payors.

In addition, we released due dates like meta features in the first quarter focused on increasing player retention and engagement, including Lucky are and swim power features which we believe eight overall monetization.

In Kook Kim: Our project Social Casino Games, Double Down Casino, or DDC, continues to be the driver of our solid results as Foliar 2023 adjusted EBITDA reached nearly 119 million dollars, and cash flow from operations for the 2023 full year exceeded $116 million, excluding the final Benson class action settlement payment earlier in the year. We continue to generate year-over-year increases in some of our most important KPIs, including average monthly revenue per payer and payer conversion rate, which indicates our great ability to offer compelling entertainment value to our core paying players. These results largely reflect the propensity of DDC players to make inappropriate choices and the continued increase in the amount paid by payers.

As we've discussed in the past the DSA revenue largely reflects activity by our wrong, Tom based players who have enjoyed our casino style games in many cases for several years.

To put in perspective, and plenty of 23, approximately 94% of our revenue was generated from our 'twenty plan.

Tiny tiny two player cohorts in other words from players hires.

In previous years.

Last October we are allocating a portion of our strong cash flow from operations to acquire <unk>, a western European Okay, I gaming operator.

Two primary markets RSV.

The U K for total cash consideration of approximately $35 million.

This acquisition is the first step in our goal to diversify our sources of revenue into new gaming categories that have highly addressable market opportunities and that are complementary to our core social casino business.

In Kook Kim: In addition, we released new DD Swipe meta features in the first quarter, focused on increasing player retention and engagement, including the Lucky Orb and Swing Power features, which we believe aid overall monetization. As we've discussed in the past, DDC revenue largely reflects activity by our base of players who have enjoyed our casino-style..., in many cases, for several years. To put this in perspective, in 2023, approximately 94% of our revenue was generated from our 2010-2022 player cohorts, in other words, from players acquired in previous years.

So formation is depreciated gaming operator, whose primary focus is on engaging.

<unk> Entertainment focused.

Online slot player rather than the more OLED type player.

It's yours brand offers compelling features for players such as peer to peer competition and elimination tournament as players play slop gains alongside one another.

So pardon Asian exited China phase III with an unaudited revenue run rate approximately $6 five.

$5 million per quarter.

Going forward, we will.

I'll leave that as apparel Allbritton, we can help get a.

Top line.

Our ability to support and grow Supranationally business includes leveraging expertise in game development.

<unk> and player engagement and monetization.

In Kook Kim: Last October, we allocated a portion of our strong cash flow from operations to Super Nation, a Western European-focused online gaming operator whose two primary markets are Sweden and the U.K., for a total cash consideration of approximately 36.5 million dollars. This position is the first step in our goal to diversify our sources of revenue into new gaming categories that have highly addressable market opportunities and that are complementary to our core social casino. SuperNation is a differentiated iGaming operator whose primary focus is on engaging the entertainment-focused online flood player rather than the more volatile player. Its dual brand offers compelling features for these players, such as peer-to-peer competition and elimination tournaments as players play slot SuperNation exited 2023 with an unaudited revenue run rate of approximately $6.5 million per quarter. Going forward, we believe that as part of Double Down, we can help this business scale its top line. Double Down's ability to support and grow SuperNation's business includes leveraging its expertise in game development, marketing, and player engagement and monetization to execute on the exciting growth opportunities in iGames.

On the exciting.

Opportunity in gaming.

We are pleased to have our.

<unk> complete and to be working closely with the supernatant leadership.

To help bring that business to the next level.

We see the gaming sector at just one update complementary gaming category, where we can deploy our resources and expertise to create new value for our shareholders.

Example, we are now in the process of launching our first game in the skill based gaming segment <unk>.

This game has me out bingo, which are developed by one of our studios in Korea allows players to compete against each other and its kilobit bingo competition.

With the opportunity to win a percent of the apps that big currency and or real estate.

Each of the participating players.

We began the launch of Kashmir bingo during the latter part of 2023 and we are now ramping marketing investment in the current quarter.

Higher players as Carol playing activity.

Now I will turn it over to our CFO Joseph <unk> to walk you through our financials before providing my closing remarks.

Yeah.

Okay and good afternoon, everyone.

Our revenues for the fourth quarter of 2023 or $83 $1 million and were comprised of $78 $8 million in revenues from our social casino free to play games and $4 $3 million of revenues from Super Nation for the 61 days when we owned the company following the actor.

Rubber 31 acquisition close.

This compares to revenues of $76 $2 million last year.

I K mentioned Q4, social casino free to play revenue, excluding Super Nation was up 8% sequentially from the third quarter of 2023, and 3% year over year.

In Kook Kim: We are pleased to have this acquisition completed and to be working closely with the Supernation leadership to help bring the business to the next level. We see the iGaming sector as just one of the complementary gaming categories where we can deploy our resources and expertise to create new value for our shareholders. For example, we are now in the process of launching our first game in the skill-based gaming segment. This game, Catch Me Out Bingo, which was developed by one of our studios in Korea, allows players to compete against each other in skill-based bingo competitions with the opportunity to win a portion of the app-specific currency, and or real cash that is earned by each of the participating players.

In the fourth quarter, several kpis metrics for our social casino business improved compared to the year ago period, including average revenue per daily active user or our DAU increased to $1.24. In Q4 2023 from <unk> 98 in Q4 2022.

Payer conversion ratio, which is the percentage of players who play within the social casino apps increased to six 4% in Q4 2023 compared to five 4% in Q4 2022 and average monthly revenue per payer increased 23% from 2200 <unk>.

Two $227 in Q4 2022 to $279 in Q4 of 2023.

On a quarterly sequential basis total operating expenses increased from $43 $3 million in the third quarter of 2023 to 47 $5 million in the fourth quarter of 2023, reflecting in part the new operating expenses associated with our ownership of.

Joe Sigrist: We began the launch of Cash Me Out Bingo during the latter part of 2023, and we are now ramping marketing investments in the current quarter to acquire players and scale playing activities. Now I will turn it over to our CFO Joe Stiglitz to walk you through our financials before hosting a green bar. So...

Super Nation.

Even with these new operating costs operating expenses for Q4 2023 declined from $51 $5 million in Q4 last year, excluding the noncash goodwill impairment charge of $269 $9 million taken in that period.

Joe Sigrist: Thank you, IK, and good afternoon, everyone. Our revenues for the fourth quarter of 2023 were $83.1 million and were comprised of $78.8 million in revenues from our Social Casino free-to-play games and $4.3 million of revenues from SuperNation for the 61 days when we owned the company following the October 31 acquisition close. This compares to revenues of $76.2 million last year. As I.K.

This decrease was primarily due to lower cost of revenue and lower sales and marketing expenses from the year ago period.

Sales and marketing expenses for the fourth quarter of 2023, or $9 9 million a decline of 41% compared to Q4, 2022, and 7% lower on a quarterly sequential basis.

Our efforts to acquire new social casino players through advertising, which has historically represented the primary cost in the sales and marketing category continued to reflect our focus on spending to ensure we deliver the best return on this investment.

Joe Sigrist: mentioned, Q4 Social Casino Free-to-Play Revenue, excluding Supernation, was up 8% sequentially from the third quarter of 2023 and 3% year-over-year. In the fourth quarter, several KPI metrics for our social casino business improved compared to the year-ago period, including average revenue per daily active user, or ARPDAU, increased to $1.24 in Q4 2023 from $0.98 in Q4 2022. The payer conversion ratio, which is the percentage of players who play within the social casino apps, increased to 6.4% in Q4 2023 compared to 5.4% in Q4 2022. The average monthly revenue Total operating expenses increased from $43.3 million in the third quarter of 2023 to $47.5 million in the fourth quarter of 2023, reflecting in part the new operating expenses associated with our ownership of SuperNation. Even with these new operating costs, operating expenses for Q4 2023 declined from $51.5 million in Q4 last year, excluding the non-cash goodwill impairment charge of $269.9 million taken in that period. This decrease was primarily due to lower cost of revenue and lower sales and marketing expenses from the year ago period.

For the first half of 2024, we anticipate that our overall sales and marketing expenses will increase from the Q4 total due to the combination of the expected full effect of the Super Nation acquisition and the launch of the new skill based game.

As described earlier.

Net income for the fourth quarter of 2023 was $35 $5 million or $10 27 per diluted share and 51 cents per <unk> compared.

Compared to a total net loss of $194 $4 million or a loss of 78.

<unk> 47 per diluted share and a loss of $3 92 per <unk> in the fourth quarter of 2020 to note that the Q4 2022 results were impacted by the noncash goodwill impairment charge of $269 $9 million I noted earlier.

Adjusted EBITDA for the fourth quarter of 2023 was $36 2 million compared to $24 $7 million for the prior year quarter. Adjusted EBITDA margin was 43, 5% for Q4 2023, representing an improvement from 32 four.

<unk> in Q4, 2022, and 47% in Q3 2023.

For the 2023 full year period, we generated adjusted EBITDA of $118 $9 million up 17% compared to the 2022 full year period.

And the adjusted EBITDA margin for 2000.

2023 full year excuse me for the 2023 12 month period.

38 <unk> five.

5% an improvement from the 2022 full year of 31, 6%.

Net cash flows from operations were $29 $7 million for the fourth quarter of 2023 compared to cash flow used in operations of $29 million in the prior year period, which included the impact of a $50 million payment towards the bench and litigation settlement.

Joe Sigrist: Sales and marketing expenses for the fourth quarter of 2023 were $9.9 million, a decline of 41% compared to Q4 2022 and 7% lower on a quarterly sequential basis. Our efforts to acquire new social casino players through advertising, which has historically represented the primary cost in the sales and marketing category, continue to reflect our focus on spending to ensure we deliver the best return on this investment. For the first half of 2024, we anticipate that our overall sales and marketing expenses will increase from the Q4 total due to the combination of the expected full effect of the Supernation acquisition and the launch of the new skill-based game IK described earlier. Net income for the fourth quarter of 2023 was $35.5 million, or $10.27 per diluted share and $0.51 per ADS, compared to a total net loss of $194.4 million, or a Note that the Q4 2022 results were impacted by the non-cash goodwill impairment charge of $269.9 million I noted earlier. Adjusted EBITDA for the fourth quarter of 2023 was $36.2 million compared to $24.7 million for the prior year quarter.

In Q4 of 2020 to.

Excluding the $95 3 million payment in the 2023 second quarter for the Benson litigation settlement cash flows provided by operating activities were $116 $1 million for the year ended December 31 2023.

Finally, turning to our balance sheet as of December 31, 2023, we had $274 $7 million in cash cash equivalents and short term investments excluding alone with our controlling shareholder we had a net cash position of approximately 235 million.

At year end or approximately $4 75 per ADR.

This completes my financial summary, now I'll turn the call overnight Kaye for closing remarks. Thank.

Thank you Joe.

We began plenty plenty for considerable momentum based on that.

Q4 results of our core social casino business.

The recent close of our first post IPO our position.

And the launch of our internally.

Internally developed game in the skill base Altegrity.

And our core social casino business, we will continue to focus on enhancing the entertainment value of Delta Downs casino with a goal of driving more engagement and even greater monetization.

We also are focused on generating more of our switch a casino part JC through direct to consumer methods.

Thereby improving margins in the largest part of our company's business.

With Super Nation, our goal our goal is to grow the business from current revenue rebel with a combination of increased marketing investment and by leveraging the skills and expertise to bring down bring to this combination.

And we will continue to pursue growth through participation in adjacent categories of gaming to boost our organic efforts and as we continue to evaluate M&A opportunities.

We are now happy to take your questions.

Operator.

Joe Sigrist: Adjusted EBITDA margin was 43.5% for Q4 2023, representing an improvement from 32.4% in Q4 2022 and 40.7% in Q3 2023. For the 2023 full-year period, we generated adjusted EBITDA of $118.9 million, up 17% compared to the 2022 full-year period, and the adjusted EBITDA margin for the 2023 12-month period was 38.5 percent, an improvement from the 2022 Net cash flows from operations were $29.7 million for the fourth quarter of 2023, compared to cash flow used in operations of $20.9 million in the prior year period, which included the impact of a $50 million payment toward the Benson litigation settlement in Q4 of 2020. Excluding the $95.3 million payment in the 2023 second quarter for the Benson litigation settlement, cash flows provided by Operating Activities were $116.1 million for the year ended December 31, 2021. Finally, turning to our balance sheet, as of December 31st, 2023, we had $274.7 million in cash, cash equivalents, and short-term investments. Including the loan with our controlling shareholder, we had a net cash position of approximately $235 million at year-end, or approximately $4.75 per ADA.

Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment for questions.

Yeah.

Our first question comes from Aaron Lee with Macquarie You May proceed.

Hey, good afternoon, Thanks for taking my question.

Just a few more months under our belt with Super Nation can you just help us.

With any guidelines to help us think about the growth potential in 2024 and are there any major milestones, we should look out for as you grow that business.

Yeah, Thanks, Eric I appreciate it.

As we've discussed.

Most important near term lever for us is marketing investment.

And we wanted to do that in support of the way they have already been marketing and acquiring new players and high ROI new players.

And we also are augmenting that with assistance in other ways of finding new players through for instance performance marketing that kind of thing.

Relative to growth as I think we've also discussed the primary again this is very short term.

Our objective is to scale the business greater than their existing strong markets, which are Sweden and the UK.

And only turned to newer markets after we have.

Worked on that for for some time. So at this point, we arent, giving guidance relative to what we think the business can can ultimately.

In the shorter term, but.

I would just say that their market share in both Sweden, and the UK is quite low single digit market share and so there's significant opportunity just just within those two countries in the short term.

Gotcha, Okay, and then a quick follow up I wanted to dig into your fourth quarter average monthly revenue prepare which was up really nicely over 20% year over year can you just kind of unpack what drove that and what you did differently versus past quarters.

Yes.

I think the.

Most important thing we want to highlight.

Is the fact that we've been investing in the product itself and BDC and maybe I can talk a little bit about some of our newer.

Monetization and retention features the meta features that we.

In Kook Kim: This completes my financial summary. Now I will turn the call over to IK for closing. Thank you, Joe. We began 2024 with considerable momentum, the Q4 result of our core social casino, the recent close of our first post-IPO, and the launch of our newly internally developed game in the skill-based category. In our core social casino business, we will continue to focus on enhancing the entertainment value of Double Down Casino with a goal of driving more engagement and even greater monetization. We also are focused on generating more revenue from our social casino business through the direct-to-consumer method, thereby improving margins in the largest part of our company. With SuperNation, our goal is to grow the business from its current revenue level with a combination of increased marketing, investment, and innovation, and by leveraging the skills and expertise Double Down brings to this combination. Additionally, we will continue to pursue growth through participation in adjacent categories of gaming through both our organic efforts and as we continue to evaluate M&A opportunities. We are now happy to take your order, Operator.

Have have especially started to implement Q4 and we'll do more of this this quarter. So do you want to talk a little bit about our focus in and adding new meta features and how important that is to.

To get payers to want to pay.

Increasing amounts with us yes.

Hi, Eric.

I can find about our new meta features like St.

Power.

Those meta features are getting more of the features.

Play.

More simply it could raise playing users potential gore. So for example.

About the feature itself look yard are awarded on slot.

Tiny X or.

More or has to be where it from.

It's <unk>.

Dedicated.

Specifically NGO and early challenges those all kind of ring matter feature could increase the users.

Engagement and retention.

Users to play more and more so.

Just wanted to highlight our product features.

Okay, Great got it thank you very much.

Great quarter.

Thank you.

One moment for questions.

Our next question comes from Greg gave us with Northland Securities You May proceed.

Hey, I can Joe Thanks for taking the questions congrats on the nice results.

Wanted to just maybe dive in a little bit more like maybe what you attribute that.

<unk>.

Operator: Thank you. As a reminder, to ask a question, please press star one on your telephone and wait for your name to be announced. To withdraw your question, please press star one again.

I think 8% sequential sequential growth in the core casino, social casino and a 3% year over year. What are you kind of attribute that to and then also what's driving that lower cost of revenue year over year.

I'm sorry, what was the second part of that Greg you were a little a little light on the volume there for me sorry, Oh, sorry about that yes, I think you spoke to lower cost of revenue year over year year over year, just curious what's kind of driving that.

Operator: One moment for questions. Our first question comes from Aaron Lee with Macquarie. He may proceed. Hey, good afternoon.

Yes.

So let me start with that one and maybe I can I can both talk about what we have.

Aaron Lee: Thanks for taking my question. You know, with just a few more months under your belt with Supernation, can you just help us with any guidelines to help us think about the growth potential in 2024? And are there any major milestones we should look out for as you grow that business? Yeah, thanks, Aaron. I appreciate it.

What we've done better than what we see as it relates to the core social casino business to drive revenue growth relative to cost of revenue as we.

Have done over the course of the year.

In Q4.

Spent less on marketing.

Specifically acquiring new users as we continue to see a somewhat challenging environment to get the right ROI for the acquisition of new users.

Joe Sigrist: As we've discussed, the most important near-term lever for us is marketing investment. And we want to do that in support of the way they have already been marketing and acquiring new players, and high ROI new players. And we also are augmenting that with assistance and other ways of finding new players through, for instance, performance marketing, that kind of, relative to growth, as I think we've also discussed our primary objective. This is a very short-term objective is to scale the business greater in their existing strong markets, which are Sweden and the UK, and only turn to newer markets after we have You know worked on that for some time. So, at this point, we aren't giving guidance relative to what we think the business can ultimately do in the shorter term, but you know, I would just say that their market share in both Sweden and the UK is quite low. I mean, Okay. And then a quick follow-up.

And as a result, we.

We have continued to curtail our spend to acquire new users again, it's very.

I will say fact based it's very much based on our <unk>.

Evaluation of the seven three.

<unk> 721 day.

Payback for newly acquired cohorts.

And that is.

<unk> continued to curtail.

Marketing to acquire new players I mean that was the primary driver of.

Of the reduction in cost of revenue for <unk> for this quarter.

Relative to the topline I mean again I think.

And I can chime in if you have any other things to comment on and I really do think the product features.

We have really helped it creates excitement for players again as <unk> said to return to play to want to be playing more and longer.

And also it gives us marketing opportunities. So we can use those features in our our content and the content the ads themselves that we go out.

Through our various partners in order to.

To acquire new players to try to reactivate lapsed players or even lapsed payers.

Joe Sigrist: I wanted to dig into your fourth quarter average monthly revenue per payer, which was up really nicely over 20% year over year. Can you just kind of unpack what drove that and what you did differently versus the past quarter? Yeah, I think the most important thing we want to highlight is the fact that we've been investing in the product itself, in BDC, and maybe I.K. can talk a little bit about some of our newer monetization and retention features, the meta features that we especially started to implement in Q4 and we'll do more this quarter. So I.K., do you want to talk a little bit about our focus on adding new meta features and how important that is to get payers to want to pay increasing amounts with us? Yes. Hi Aaron.

Payers, who may still be playing but haven't paid for a while those those new features are really exciting things for us to use too.

To get players to re engage her to engage more.

Great very helpful.

I know youre not officially guiding but wanted to get maybe your high level thoughts on financial expectations for next year like you just spoke to kind of the product features driving player excitement that return to growth.

When I think about the core social casino business should we think about this 3% growth year over year as being kind of a fair assuming no other changes or just kind of wondering how youre thinking about.

The top line in 2024.

Yeah No I appreciate the question and the reality is as we all know.

And especially if we look at that.

The industry analyst reports.

In Kook Kim: I can explain our new meta features like Lucky Orb and Flame Power. Those meta features are getting more reward features as users play more. Simply, it could raise slot playing users retention more.

The social casino category is a very mature category estimates.

For the entire market suggest kind of a flattish.

Market going forward.

From 2023 to 2024 and even beyond for the next couple of years after that so I think the core.

In Kook Kim: So, for example, about the feature itself, Lucky Orbs are awarded on slot wins of TinyX or more, or, as we were from, it's dedicated specific league bingo and daily challenges. All these kind of meta features could increase users' engagement and retention, so it helps users to play more and more, so that's what I just wanted to highlight about our product. Okay, great. Got it. Thank you very much. Pre-Quarter.

Market is flat.

Question is can we.

We did in Q4, frankly can we take share based on the things that we.

We uniquely <unk> and <unk>.

And differentiated way do with double down casino and we were successfully able to do that in Q4.

And we strive to do that every quarter.

Frankly, that's our objective that's our goal that's our challenge.

<unk>.

<unk>.

It's something that we have.

We've been very focused on doing but.

Operator: Thank you. One moment for questions. Our next question comes from Greg Gibbess with Northland Securities. He may proceed. Hey, I can, Joe.

Recognize that it's in the context of essentially a flat.

Very profitable very cash generative category of gaming.

Essentially a flat category.

Got it that's fair.

Greg Gibbess: Thanks for taking the questions. Congratulations on the nice result. I wanted to just maybe dive in a little bit more, like, maybe what you attribute that, um, you know, I think 8% sequential growth in the core casino or social casino and then 3% year over year. What do you kind of attribute that to? And then also, what's driving that lower cost of revenue here? I'm sorry, what's the second part of that, Greg? You were a little light on the volume there for me.

Lastly from me just wanted to follow up on future Super Nation.

Since closing at the end of October.

How is it kind of performed relative to your expectations and I know, it's just given it's been a couple of months here.

You spoke to kind of the initiatives that you've implemented.

I guess, the focus earliest Sweden and the UK when do you foresee kind of looking at new markets for that business.

Okay.

That's correct.

Sure.

The most important thing for us.

<unk>.

<unk> is defined scalability to get a bigger market share.

Although traditional I gaming casino business could only provide just playing casino content.

Greg Gibbess: Sorry. Oh, sorry about that. Yeah, I think you spoke to a lower cost of revenue year over year. I'm just curious what's kind driving that.

Experienced supplier not only went to seek additional differentiated.

Opportunity by offering compelling features.

Joe Sigrist: Yeah. Um, so, you know, let me start with that one. And maybe I can I can both talk about what we've done better and what we see as it relates to the core social casino business to drive revenue growth. You know, relative to the cost of revenue, as we have done over the course of the year, we in Q4 spent less on marketing, specifically acquiring new users, as we continue to see a somewhat challenging environment to get the right ROI for the acquisition of new users. And as a result, we have Again, it's very, you know, I'll say fact-based. It's very much based on our evaluation of the 7, 3, 7, 21 day for newly acquired cohorts. And that had us continue to curtail, you know, marketing and acquisition of new players. I mean, that was the primary driver of the reduction in revenue costs for this quarter.

Players such as peer to peer competition.

As I.

As I talked about earlier.

So far November December so.

A bit.

Good result, so far so.

Our.

Ongoing development and improvement.

Everything goes well and we will increase our marketing capabilities to scale up quickly.

Got it thank you.

Thanks, Greg.

Thank you and as a reminder to ask a question. Please press star one on your telephone one moment for questions.

And I'm not showing any more questions. At this time I would now like to turn the call back over to Joe <unk> for any closing remarks.

Great. Thanks, Josh I appreciate it thanks, everyone for your time today, and we look forward to talking to you again soon and have a great evening and a great Wednesday Tomorrow Bye bye.

Thank you for your participation you may now disconnect.

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Joe Sigrist: Relative to the top line, I mean, again, I think, and I can chime in if you have any other things to comment on, I really do think the product features have really helped. It creates excitement for players, again, as I said, to return to play, to want to be playing more and longer. And also, it gives us marketing opportunities. So we can use those features in our content, in the content, and in the ads themselves that we go out through our various partners in order to, you know, acquire new players, to try to reactivate lapsed players or even lapsed payers who may still be playing but haven't paid for a while. Those new features are really exciting things for us to use to get players to re-engage or to engage more.

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Joe Sigrist: Great, very helpful. And, you know, I know you're not officially guiding, but I wanted to get just maybe your high-level thoughts on financial expectations for next year. Like, you know, you just spoke about kind of the product features driving player excitement, you know, that return to growth is, you know, when I think about the core social casino business, we think about this, you know, 3% growth year over year as being kind of fair, you know, assuming no other changes, or just just kind of wondering how you're thinking about, you know, the top line in 2020. Yeah, no. I appreciate the question. And you know, the reality is, as we all know, and especially if we look at the industry analyst reports, the casino category is a very mature category, and estimates for the entire market suggest kind of a flattish market going forward, from 2023 to 2024 and even beyond for the next couple of years after that. So I think the core market is flat.

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Joe Sigrist: The question is, can we, as we did in Q4, frankly, can we take share based on the things that we uniquely and in a differentiated way do with Double Down Casino? And we were successfully able to do that in Q4. And we strive to do that every quarter.

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Joe Sigrist: That's our, Frankly, that's our objective, that's our goal, that's our challenge, and that is something that we've been very focused on doing. But recognize that it's in the context of essentially a flat, very profitable, very cash-generative category of gaming, but essentially a flat category.

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Joe Sigrist: Got it, that's fair. You know, I think lastly for me, just wanted to follow up on Supernation, since it closed at the end of October, how has it kind of performed relative to your expectations? And I know it's, you know, just given it's been a couple months here, you know. You spoke about kind of the initiatives that you implemented. I guess the early focus is Sweden and the UK. When do you foresee kind of looking at new markets for that business? www.interactive.com Thanks, Greg. This is Ike. The most important thing for us about supernation is to find scalability to get a bigger market share, and although a traditional iGaming casino business could only provide just playing casino games and its experience so far.

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In Kook Kim: Now we want to see additional differentiation and opportunities by offering compiling features for these players, such as peer-to-peer, as I talked earlier. So, so far, November, and December, we saw a bit of good results so far. So we've packed our ongoing development and improvement. If everything goes well, then we will increase our marketing capabilities to scale up.

Yes.

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In Kook Kim: Got it. Thank you. Thanks, Greg. Thank you. And as a reminder, to ask a question, please press star one one on your telephone. One moment for questions. And I'm not showing any more questions at this time. I would now like to turn the call back over to Joe Sigrist for any closing remarks. Great. Thanks, Josh. Appreciate it. Thanks everyone for your time today and we look forward to talking to you again soon and have a great evening and a great Wednesday tomorrow. Bye bye. Thank you for your participation, you may now disconnect. The Recorded Version www.mytrendyphone.co.uk, The fuck is this video? ... ... ... ... ... GET LOST I have a fear of heights yet doing this I put in something so I can free the glitch no no ... ... ... ... ... .... .. ... ... ... ... ... The Stars Are Falling © 2019 Mooji Media Ltd. All Rights Reserved. No part of this recording may be reproduced without Mooji Media Ltd.'s express consent. Bluestice Bluestice gesu Bluestice Bluestice Bluestice Bluestice Bluestice, Interactive Human Path Interactive Human Muscle Interactive Humanisenior.com, Thanks For Watching!

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