Key Highlights

  • Third-quarter Revenue fell 1.6% to $94.3 million from $95.8 million a year earlier.
  • Direct-to-consumer revenue more than doubled to $44.6 million and reached 58.0% of social casino revenue.
  • Adjusted EBITDA rose 7.2% to $40.2 million, with the Margin widening to 42.7%.
  • Net profit fell 43.9% to $18.4 million, mainly because of foreign currency losses and higher tax expense.

DoubleDown Interactive Co., Ltd. (NASDAQ:DDI), a developer and publisher of digital games for mobile and web platforms, reported unaudited results for the quarter ended September 30, 2026. Revenue was $94.3 million, slightly below the $95.8 million reported a year earlier. Beneath the small top-line decline sat a sharp change in how the company sells its games, as a larger share of revenue came through direct-to-consumer channels and profit measures moved higher, while net profit fell. The results also reflect how the company's Business is changing as more of its revenue moves to channels it controls.

Revenue Mix and the Shift to Direct Sales

Revenue from social casino and free-to-play games was $76.8 million, down 3.5% from a year earlier. The company said the decline was mainly due to lower revenue from its DoubleDown titles, excluding those from WHOW Games. Revenue from SuprNation, its iGaming subsidiary, rose 7.4% to $17.4 million, which the company attributed largely to its newer Los Vegas brand.

Direct-to-consumer revenue rose to $44.6 million from $16.6 million, and it accounted for 58.0% of social casino revenue, compared with 20.9% a year earlier and 52.4% in the second quarter of 2026. Because platform fees charged by app stores fall as more sales are made directly, the shift matters for cost structure as well as for total sales.

Direct sales let the company keep a larger share of each dollar spent by players, rather than paying a platform intermediary. That is why the shift in mix shows up in profit even when total revenue is flat.

Growth in social casino tends to depend on retaining paying players and raising spending per user. The company's gains in payer conversion and revenue per daily user point to that approach.

Operating Costs and Profitability

Operating expenses fell to $56.8 million from $60.9 million, which the company linked mainly to lower platform fees as more social casino revenue came through its direct channels. Operating profit increased to $37.5 million from $35.0 million, a result that reflects lower cost of revenue tied to the higher share of direct sales.

Net profit attributable to the company, excluding non-controlling interests, fell 43.9% to $18.4 million, or $7.41 per fully diluted common share. The company said the drop mainly reflected net foreign currency losses on U.S. dollar-denominated financial Assets and higher income tax expense. Adjusted EBITDA rose 7.2% to $40.2 million, and its margin increased to 42.7% from 39.1%.

Revenue from SuprNation is a separate growth engine tied to iGaming, which operates under different regulatory and tax regimes from social casino games. The company noted that higher gaming duties in that segment partly offset its gains.

Diversification across social casino and iGaming can reduce reliance on any single title, though the update does not give the share of revenue from each brand.

Player Metrics and the WHOW Effect

Key player metrics improved. The payer conversion ratio for social casino and free-to-play games rose to 9.5% from 7.8%, and average revenue per daily active user increased to $1.44 from $1.39. The company said both gains were driven mainly by the inclusion of WHOW Games, which has a higher payer conversion ratio.

Because KPIs now include WHOW Games from the fourth quarter of 2025, year-over-year comparisons on these measures are not fully like-for-like with the prior-year period. Readers should weigh the acquired contribution when assessing the underlying trend.

Platform fees are a large cost for mobile publishers, and a rising share of direct sales changes how those costs move with revenue. Lower platform fees helped operating expenses fall despite the company's ongoing Investment in its products.

The company's adjusted EBITDA margin of 42.7% is a measure of operating profitability before certain items, and it shows the cost benefit of the mix change in clear terms.

Currency Exposure and Open Questions

The swing from operating profit growth to a lower net profit illustrates how much of the company's reported Earnings can be affected by currency movements and taxes. Foreign currency losses on dollar-denominated assets are not a function of game operations, which makes the net figure harder to read as a measure of business performance.

The update does not provide revenue guidance for the coming quarters in the sections reviewed. Key questions for the company include whether DTC penetration continues to rise, whether the payer conversion gains persist without acquisitions and whether SuprNation can sustain its growth rate.

Investors weighing the company's results will want to know how much of the increase in payer conversion would persist if acquired titles were excluded, and how much spending on user Acquisition supports the direct channel.

Final Word

DoubleDown ended the quarter with revenue close to the prior year's level, but its mix moved decisively toward direct sales, lowering platform costs and lifting adjusted EBITDA. Net profit fell because of currency losses and taxes rather than operating weakness. Future results will show whether the direct channel can keep rising and whether profit measures track operating performance more closely. The mix shift and the currency effects will both need to be followed in the next set of results.