In This Article:
Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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DoubleUGames Co Ltd (XKRX:192080) achieved a revenue of 633.5 billion won in 2024, marking an 8.8% year-over-year growth, the highest since 2020.
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Operating profit reached 248.7 billion won, the highest since inception, with a 17% year-over-year increase.
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The company reduced marketing expenses from 15% of revenue in 2023 to 8% in 2024, improving cost efficiency.
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Net income increased by 23.2% year-over-year, reaching the highest annual net income in the company's history.
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The iGaming segment showed significant growth, with NGR increasing by 41% in January 2025 compared to the Q4 monthly average.
Negative Points
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Marketing expenses for iGaming remain high, accounting for 30-40% of revenue, which could impact profitability.
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The company's reliance on foreign exchange gains for net income growth may pose risks if currency rates fluctuate unfavorably.
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Platform costs remain a significant expense, constituting 30% of revenue, despite efforts to reduce them.
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The acquisition of Poxy Games is still under review by the Turkish Competition Authority, causing potential delays in consolidation.
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The company's target to double the DTC platform payment percentage from 8% may face challenges, impacting expected margin improvements.
Q & A Highlights
Q: Can you share more information about your sales-related strategies per game segment and marketing expenses guidance, particularly for social casino and new businesses? A: For social games, we aim for single-digit growth without increasing marketing expenses, focusing on efficiency. In iGaming, we started full-scale marketing in November, targeting 50-60 billion won this year, aiming for double-digit growth. For Poxy Games, we expect to close the acquisition by February or March and maintain current revenue levels, with plans to expand with new games like Merge or Mass Merge.
Q: What are your plans for marketing expenses in the social casino segment and how do you plan to improve profitability? A: We aim to maintain marketing expenses at 8% of revenue for social casinos to improve investment efficiency. In iGaming, we spend 30-40% of revenue on marketing, promoting a scale of economy strategy. For Poxy Games, we apply the same strategy, expecting a 6-7 month payback period. Our goal for 2025 is to maximize sales and profitability without compromising profit quality.
Q: How did currency rate changes impact your 2024 performance, and what is your forecast for Q1 2025? Also, can you explain your cash assets and their utilization? A: Currency rate changes had a non-operating impact in Q4 2024, with a higher average rate expected in Q1 2025. We have 820 billion won in cash assets, with plans for M&A to ensure stable cash flow and profitability. We aim to expand our network and complete meaningful M&A deals this year.