DoubleDown Interactive Company Ltd (DDI) News

INFORMATION CONTAINED IN THIS FORM

6-K

REPORT

Issuance of Press Release; Financial Statements

On November 8, 2023, DoubleDown Interactive Co., Ltd. (the “

Company

”) issued a press release announcing its financial results for the third quarter ended September 30, 2023 and its unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2023.

The press release furnished in this report as Exhibit 99.1 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, as amended, except to the extent specifically provided in such a filing.

The unaudited condensed consolidated financial statements furnished in this report on Exhibit 99.2 is hereby incorporated by reference into the Company’s Registration Statement on Form

F-3

(File

No. 333-267422),

to be a part there of from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.

EXHIBIT INDEX


Exhibit No.		Description

99.1		Press release of the Company, dated November 8, 2023

99.2		Unaudited condensed consolidated financial statements of the Company for the three and nine months ended September 30, 2023

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Exhibit 99.1

LOGO

DoubleDown Interactive Reports Third Quarter 2023 Financial Results

SEATTLE, WASHINGTON – November 8, 2023 — DoubleDown Interactive Co., Ltd. (NASDAQ: DDI) (“DoubleDown” or the “Company”), a leading developer and publisher of digital games on mobile and web-based platforms, today announced its unaudited financial results for the third quarter ended September 30, 2023.

Third Quarter 2023 vs. Third Quarter 2022 Summary:

•

Revenues of $73.0 million in the third quarter of 2023 compared to $78.8 million in the third quarter of 2022.

•

Operating costs of $43.3 million in the third quarter of 2023, a decline from $124.1 million in the third quarter of 2022, primarily due to a $70.25 million non-cash accrual (associated with legal proceedings related to the previously disclosed Benson litigation) in general and administrative expense in the third quarter of 2022 which did not recur in the third quarter of 2023, with the balance of the reduction primarily reflecting lower cost of revenue and decreased marketing expenses.

•

Adjusted EBITDA of $29.7 million for the third quarter of 2023, an increase from $25.0 million for the third quarter of 2022, primarily due to lower sales and marketing expenses. The adjusted EBITDA margin increased to 40.7% in the third quarter of 2023 from 31.7% in the third quarter of 2022.

•

Net income of $26.9 million, or earnings per fully diluted common share of $10.87 ($0.54 per American Depositary Share (“ADS”)), in the third quarter of 2023, compared to a loss of $24.0 million, or a loss of $9.69 per fully diluted common share ($(0.48) per ADS), in the third quarter of 2022. Note each ADS represents 0.05 share of a common share.

•

Average Revenue Per Daily Active User (“ARPDAU”) increased to $1.06 in the third quarter of 2023 from $0.96 in the third quarter of 2022.

•

Average monthly revenue per payer increased to $245 in the third quarter of 2023 from $225 in the third quarter of 2022.

“DoubleDown generated solid third quarter results including a nearly 19% year-over-year increase in Adjusted EBITDA to $29.7 million and $28.7 million in operating cash flow,” said In Keuk Kim, Chief Executive Officer of DoubleDown. “Payer engagement remains strong, in particular for our flagship social casino game DoubleDown Casino, as ARPDAU and average monthly revenue per payer rose 10% and 9%, respectively compared to the third quarter of 2022. Our business model and prudent management of operating expenses continues to deliver strong Adjusted EBITDA margins which through the first nine months of 2023 is up 530 basis points compared to the same period in 2022.

“Our solid cash generation continues to strengthen our balance sheet as inclusive of debt, we have approximately $200 million in net cash and short-term investments even after the cash payment of approximately $36.5 million to complete the acquisition of SuprNation at the end of October. We are excited to have completed the SuprNation acquisition as it marks our entrance into the European iGaming market, which, we believe, is a high-growth gaming category that is complementary to our core operations. We are confident we can leverage our game development expertise and marketing platform to profitably scale SuprNation. With this acquisition completed, we are continuing to evaluate opportunities to deploy capital to further expand our business into high-growth gaming categories with attractive addressable markets to create new value for our shareholders.”

Summary Operating Results for DoubleDown Interactive (Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenue ($ MM)	$	73.0		$	78.8		$	225.8		$	244.9
Total operating expenses		43.3			124.1			143.2			313.5
Loss contingency		—			70.3			—			141.8
Adjusted EBITDA ($ MM)	$	29.7		$	25.0		$	82.8		$	76.9
Net income ($ MM)	$	26.9		$	(24.0	)	$	75.0		$	(39.6	)
Net income margin		36.9	%		(30.5	)%		33.2	%		(16.2	)%
Adjusted EBITDA margin		40.7	%		31.7	%		36.7	%		31.4	%

Non-financial performance metrics
Average MAUs (000s)		1,675			2,267			1,837			2,301
Average DAUs (000s)		749			907			794			941
ARPDAU	$	1.06		$	0.96		$	1.05		$	0.96
Average monthly revenue per payer	$	245		$	225		$	234		$	225
Payer conversion		5.9	%		5.2	%		5.9	%		5.3	%

Third Quarter 2023 Financial Results

Revenue in the third quarter of 2023 was $73.0 million, a decline of 7% from the third quarter of 2022. The decrease was primarily due to changes in player behavior as a result of inflation and global economic concerns and the Company’s decreased marketing activities to attract a higher user base.

Operating expenses in the third quarter of 2023 were $43.3 million, a 65% decrease from the third quarter of 2022. The decrease in operating expenses was primarily due to lower cost of revenue and decreases in marketing expenses in the third quarter of 2023, as compared to the third quarter of 2022 and reflects the $70.25 million non-cash accrual in the third quarter of 2022 noted above which did not recur in the comparable 2023 period.

The Company recorded net income of $26.9 million in the third quarter of 2023, or $10.87 per fully diluted common share ($0.54 per ADS), as compared to a net loss of $24.0 million, or a loss of $9.69 per fully diluted common share ($(0.48) per ADS) in the third quarter of 2022. The net loss in the third quarter of 2022 included the impact of the $70.25 million non-cash accrual noted above. Net income for the third quarter of 2023 reflects lower marketing expenditures, partially offset by a decline in revenue. Note each ADS represents 0.05 share of a common share.

Adjusted EBITDA in the third quarter of 2023 was $29.7 million, compared to $25.0 million in the third quarter of 2022. The increase was primarily due to lower sales and marketing expenses, partially offset by a decline in revenue.

Net cash flows from operating activities for the third quarter of 2023 were $28.7 million, compared to net cash flows provided by operating activities of $22.2 million in the third quarter of 2022. The increase was primarily driven by higher operating income.

Conference Call

DoubleDown will hold a conference call today (November 8, 2023) at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to discuss these results. A question-and-answer session will follow management’s presentation.

To access the call, please use the following link: DoubleDown Third Quarter 2023 Earnings Call. After registering, an email will be sent, including dial-in details and a unique conference call access code required to join the live call. To ensure you are connected prior to the beginning of the call, please register a minimum of 15 minutes before the start of the call.

A simultaneous webcast of the conference call will be available with the following link: DoubleDown Third Quarter 2023 Earnings Webcast, or via the Investor Relations page of the DoubleDown website at ir.doubledowninteractive.com. For those not planning to ask a question on the conference call, the Company recommends listening via the webcast.

A replay will be available on the Company’s Investor Relations website shortly after the event.

About DoubleDown Interactive

DoubleDown Interactive Co., Ltd. is a leading developer and publisher of digital games on mobile and web-based platforms. We are the creators of multi-format interactive entertainment experiences for casual players, bringing authentic Vegas entertainment to players around the world through an online social casino experience. Our flagship title, DoubleDown Casino, has been a fan-favorite game on leading social and mobile platforms for years, entertaining millions of players worldwide with a lineup of classic and modern games.

Safe Harbor Statement

Certain statements contained in this press release are “forward-looking statements” about future events and expectations for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on our beliefs, assumptions, and expectations of industry trends, our future financial and operating performance, and our growth plans, taking into account the information currently available to us. These statements are not statements of historical fact. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Therefore, you should not place undue reliance on such statements. Words such as “anticipates,” believes,” “continues,” “estimates,” “expects,” “goal,” “objectives,” “intends,” “may,” “opportunity,” “plans,” potential,” “near-term,” long-term,” “projections,” “assumptions,” “projects,” “guidance,” “forecasts,” “outlook,” “target,” “trends,” “should,” “could,” “would,” “will,” and similar expressions are intended to identify such forward-looking statements. We qualify any forward-looking statements entirely by these cautionary factors. We assume no obligation to update or revise any forward-looking statements for any reason or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Use and Reconciliation of Non-GAAP Financial Measures

In addition to our results determined in accordance with the accounting principles generally accepted in the United States of America (“GAAP”), we believe the following non-GAAP financial measure is useful in evaluating our operating performance. We present “adjusted earnings before interest, taxes, depreciation and amortization” (“Adjusted EBITDA”) because we believe it assists investors and analysts by facilitating comparison of period-to-period operational performance on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. The items excluded from the Adjusted EBITDA may have a material impact on our financial results. Certain of those items are non-recurring, while others are non-cash in nature. Accordingly, the Adjusted EBITDA is presented as supplemental disclosure and should not be considered in isolation of, as a substitute for, or superior to, the financial information prepared in accordance with GAAP, and should be read in conjunction with the financial statements furnished in our report on Form 6-K to be filed with the SEC.

In our reconciliation from our reported GAAP “net income before provision for taxes” to our Adjusted EBITDA, we eliminate the impact of the following seven line items: (i)depreciation and amortization; (ii) loss contingency related to the Benson case; (iii) interest income; (iv) interest expense; (v) foreign currency transaction/remeasurement (gain) loss; (vi) short-term investments (gain) loss; and (vii) other (income) expense, net. The below table sets forth the full reconciliation of our non-GAAP measures:


Reconciliation of non-GAAP measures	September 30,						September 30,
(in millions, except percentages)	2023			2022			2023			2022
Net income (loss)	$	26.9		$	(24.0	)	$	75.0		$	(39.6	)
Income tax benefit (expense)		(7.8	)		4.9			(22.1	)		10.9
Income (loss) before tax		34.7			(28.9	)		97.1			(50.5	)

Adjustments for:
Depreciation and amortization		0.1			0.0			0.2			3.8
Loss contingency		—			70.3			—			141.8
Interest income		(3.1	)		(1.9	)		(10.5	)		(2.7	)
Interest expense		0.4			0.4			1.3			1.4
Foreign currency transaction/remeasurement gain		(2.3	)		(9.3	)		(5.4	)		(17.0	)
Short-term investments (gain) loss		0.0			(5.7	)		0.1			0.2
Other (income) expense, net		(0.1	)		0.0			0.0			0.1
Adjusted EBITDA	$	29.7		$	25.0		$	82.8		$	76.9
Adjusted EBITDA margin		40.7	%		31.7	%		36.7	%		31.4	%

We encourage investors and others to review our financial information in its entirety and not to rely on any single financial measure.

Company Contact:

Joe Sigrist

ir@doubledown.com

+1 (206) 773-2266

Chief Financial Officer

https://www.doubledowninteractive.com

Investor Relations Contact:

Joseph Jaffoni or Richard Land

JCIR

+1 (212) 835-8500

DDI@jcir.com

DoubleDown Interactive Co., Ltd.

Condensed Consolidated Balance Sheets

(In thousands of U.S. dollars, except share and per share amounts)


	September 30,		December 31,
	2023		2022
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	233,936	$	217,352
Short-term investments		37,231		67,891
Accounts receivable, net		27,834		21,198
Prepaid expenses, and other assets		6,307		6,441

Total current assets	$	305,308	$	312,882
Property and equipment, net		440		436
Operating lease right-of-use assets, net		1,726		3,858
Intangible assets, net		35,046		35,051
Goodwill		379,072		379,072
Deferred tax asset		37,683		59,290
Other non-current assets		1,308		1,463

Total assets	$	760,583	$	792,052

Liabilities and Shareholders’ Equity
Accounts payable and accrued expenses	$	10,358	$	13,830
Short-term operating lease liabilities		2,020		3,050
Income taxes payable		15		—
Contract liabilities		2,044		2,426
Loss contingency		—		95,250
Current portion of borrowings with related party		37,180		—
Other current liabilities		1,158		1,926

Total current liabilities	$	52,775	$	116,482
Long-term borrowings with related party		—		39,454
Long-term operating lease liabilities		176		1,625
Other non-current liabilities		9,772		8,265

Total liabilities	$	62,723	$	165,826

Shareholders’ equity
Common stock, KRW 10,000 par value - 200,000,000 Shares authorized; 2,477,672 issued and outstanding		21,198		21,198
Additional paid-in-capital		359,280		359,280
Accumulated other comprehensive income		16,036		19,360
Retained earnings		301,346		226,388

Total shareholders’ equity	$	697,860	$	626,226

Total liabilities and shareholders’ equity	$	760,583	$	792,052

DoubleDown Interactive Co., Ltd.

Condensed Consolidated Statement of Income and Comprehensive Income

(Unaudited, in thousands except share and per share amounts)


	Three months ended September 30,						Nine months ended September 30,
	2023			2022			2023			2022
Revenue	$	72,983		$	78,801		$	225,766		$	244,857
Operating expenses:
Cost of revenue⁽¹⁾		23,658			27,119			74,282			83,464
Sales and marketing⁽¹⁾		10,585			17,214			39,733			55,056
Research and development⁽¹⁾		4,361			4,691			14,473			13,704
General and administrative⁽¹⁾		4,644			4,821			14,526			15,771
Loss Contingency⁽¹⁾		—			70,250			—			141,750
Depreciation and amortization		55			45			158			3,751

Total operating expenses		43,303			124,140			143,172			313,496

Operating income (loss)	$	29,680		$	(45,339	)	$	82,594		$	(68,639	)

Other income (expense):
Interest expense		(443	)		(431	)		(1,341	)		(1,356	)
Interest income		3,132			1,948			10,511			2,742
Gain on foreign currency transactions		1,177			541			3,907			856
Gain on foreign currency remeasurement		1,096			8,748			1,484			16,163
Gain (loss) on short-term investments		(7	)		5,651			(76	)		(155	)
Other, net		91			(42	)		(4	)		(98	)

Total other income (expense), net	$	5,046		$	16,415		$	14,481		$	18,152

Income (loss) before income tax	$	34,726		$	(28,924	)	$	97,075		$	(50,487	)

Income tax (expense) benefit		(7,796	)		4,925			(22,116	)		10,926

Net income (loss)	$	26,930		$	(23,999	)	$	74,959		$	(39,561	)

Other comprehensive income (expense):
Pension adjustments, net of tax		(48	)		102			(156	)		(185	)
Loss on foreign currency translation		(1,821	)		(6,115	)		(3,168	)		(11,087	)

Comprehensive income (loss)	$	25,061		$	(30,012	)	$	71,635		$	(50,833	)

Earnings (loss) per share:
Basic	$	10.87		$	(9.69	)	$	30.25		$	(15.97	)
Diluted	$	10.87		$	(9.69	)	$	30.25		$	(15.97	)
Weighted average shares outstanding:
Basic		2,477,672			2,477,672			2,477,672			2,477,672
Diluted		2,477,672			2,477,672			2,477,672			2,477,672

⁽¹⁾	Excluding depreciation and amortization.

DoubleDown Interactive Co., Ltd.

Condensed Consolidated Statement of Cash Flows

(Unaudited, in thousands of U.S. dollars)


	Nine months ended September 30,
	2023			2022
Cash flow from (used in) operating activities:
Net income (loss)	$	74,959		$	(39,561	)
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		158			3,751
Gain on foreign currency remeasurement		(1,484	)		(16,163	)
Loss on short-term investments		76			155
Deferred taxes		21,110			(26,716	)
Working capital adjustments:
Accounts receivable		(6,847	)		703
Prepaid expenses, other current and non-current assets		1,090			(1,391	)
Accounts payable, accrued expenses and other payables		(3,381	)		1,033
Contract liabilities		(382	)		(80	)
Income tax payable		15			—
Loss Contingency		(95,250	)		141,750
Other current and non-current liabilities		1,055			8,215

Net cash flows from (used in) operating activities	$	(8,881	)	$	71,696
Cash flow from (used in) investing activities:
Purchases of intangible assets		—			(3	)
Purchases of property and equipment		(173	)		(164	)
Disposals of property and equipment					27
Issuance of note receivable		(1,086	)		—
Purchases of short-term investments		(47,465	)		(366,449	)
Sales of short-term investments		75,633			366,293

Net cash flows from (used in) investing activities	$	26,909		$	(296	)
Cash flow from (used in) financing activities:

Net cash flows from (used in) financing activities:	$	—		$	—
Net foreign exchange difference on cash and cash equivalents		(1,444	)		(2,992	)

Net decrease in cash and cash equivalents	$	16,584		$	68,408

Cash and cash equivalents at beginning of period	$	217,352		$	242,060
Cash and cash equivalents at end of period	$	233,936		$	310,468
Cash paid during year for:
Interest		—			—
Income taxes	$	20		$	11,415

Exhibit 99.2

DoubleDown Interactive Co., Ltd.

Condensed Consolidated Financial Statements (unaudited)

September 30, 2023 and September 30, 2022

Contents


Consolidated Financial Statements as of and for the three and nine months ended September 30, 2023 and 2022
Condensed Consolidated Statements of Income and Comprehensive Income			F-2
Condensed Consolidated Balance Sheets			F-3
Condensed Consolidated Statements of Changes in Shareholders’ Equity			F-4
Condensed Consolidated Statements of Cash Flows			F-5
Notes to Condensed Consolidated Financial Statements			F-6

DoubleDown Interactive Co., Ltd.

Condensed Consolidated Statements of Income and Comprehensive Income

(unaudited, in thousands of U.S. Dollars, except share and per share amounts)


	Three months ended September 30,						Nine months ended September 30,
	2023			2022			2023			2022
Revenue	$	72,983		$	78,801		$	225,766		$	244,857
Operating expenses:
Cost of revenue (1)		23,658			27,119			74,282			83,464
Sales and marketing (1)		10,585			17,214			39,733			55,056
Research and development (1)		4,361			4,691			14,473			13,704
General and administrative (1)		4,644			4,821			14,526			15,771
Loss Contingency (1)		—			70,250			—			141,750
Depreciation and amortization		55			45			158			3,751

Total operating expenses		43,303			124,140			143,172			313,496

Operating income (loss)	$	29,680		$	(45,339	)	$	82,594		$	(68,639	)

Other income (expense):
Interest expense		(443	)		(431	)		(1,341	)		(1,356	)
Interest income		3,132			1,948			10,511			2,742
Gain on foreign currency transactions		1,177			541			3,907			856
Gain on foreign currency remeasurement		1,096			8,748			1,484			16,163
Gain (loss) on short-term investments		(7	)		5,651			(76	)		(155	)
Other, net		91			(42	)		(4	)		(98	)

Total other income (expense), net	$	5,046		$	16,415		$	14,481		$	18,152

Income (loss) before income tax	$	34,726		$	(28,924	)	$	97,075		$	(50,487	)

Income tax (expense) benefit		(7,796	)		4,925			(22,116	)		10,926

Net income (loss)	$	26,930		$	(23,999	)	$	74,959		$	(39,561	)

Other comprehensive income (expense):
Pension adjustments, net of tax		(48	)		102			(156	)		(185	)
Loss on foreign currency translation		(1,821	)		(6,115	)		(3,168	)		(11,087	)

Comprehensive income (loss)	$	25,061		$	(30,012	)	$	71,635		$	(50,833	)

Earnings (loss) per share:
Basic	$	10.87		$	(9.69	)	$	30.25		$	(15.97	)
Diluted	$	10.87		$	(9.69	)	$	30.25		$	(15.97	)
Weighted average shares outstanding:
Basic		2,477,672			2,477,672			2,477,672			2,477,672
Diluted		2,477,672			2,477,672			2,477,672			2,477,672

(1)	Excluding depreciation and amortization.

See accompanying notes to consolidated financial statements.

DoubleDown Interactive Co., Ltd.

Condensed Consolidated Balance Sheets

(in thousands of U.S. Dollars, except share amounts)


	September 30,		December 31,
	2023		2022
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	233,936	$	217,352
Short-term investments		37,231		67,891
Accounts receivable, net		27,834		21,198
Prepaid expenses, and other assets		6,307		6,441

Total current assets	$	305,308	$	312,882
Property and equipment, net		440		436
Operating lease right-of-use assets, net		1,726		3,858
Intangible assets, net		35,046		35,051
Goodwill		379,072		379,072
Deferred tax asset		37,683		59,290
Other non-current assets		1,308		1,463

Total assets	$	760,583	$	792,052

Liabilities and Shareholders’ Equity
Accounts payable and accrued expenses	$	10,358	$	13,830
Short-term operating lease liabilities		2,020		3,050
Income taxes payable		15		—
Contract liabilities		2,044		2,426
Loss contingency		—		95,250
Current portion of borrowings with related party		37,180		—
Other current liabilities		1,158		1,926

Total current liabilities	$	52,775	$	116,482
Long-term borrowings with related party		—		39,454
Long-term operating lease liabilities		176		1,625
Other non-current liabilities		9,772		8,265

Total liabilities	$	62,723	$	165,826

Shareholders’ equity
Common stock, KRW 10,000 par value - 200,000,000 Shares authorized; 2,477,672 issued and outstanding		21,198		21,198
Additional paid-in-capital		359,280		359,280
Accumulated other comprehensive income		16,036		19,360
Retained earnings		301,346		226,388

Total shareholders’ equity	$	697,860	$	626,226

Total liabilities and shareholders’ equity	$	760,583	$	792,052

See accompanying notes to consolidated financial statements.

DoubleDown Interactive Co., Ltd.

Condensed Consolidated Statements of Changes in Shareholders’ Equity

(unaudited, in thousands of U.S. Dollars, except share amounts)


	Common shares		Common stock		Additional paid- in- capital			Accumulated other comprehensive income/(loss)			Retained earnings (deficit)			Total shareholders’ equity
Three months ended September 30, 2023
As of July 1, 2023		2,477,672		21,198		359,280			17,905			274,416			672,799
Net income		—		—		—			—			26,930			26,930
Pension adjustments, net of tax		—		—		—			(48	)		—			(48	)
Loss on foreign currency translation, net of tax		—		—		—			(1,821	)		—			(1,821	)

As of September 30, 2023		2,477,672		21,198		359,280			16,036			301,346			697,860
Three months ended September 30, 2022
As of July 1, 2022		2,477,672		21,198		671,831			17,774			132,254			843,057
Net loss		—		—		—			—			(23,999	)		(23,999	)
Pension adjustments, net of tax		—		—		—			102			—			102
Loss on foreign currency translation, net of tax		—		—		—			(6,115	)		—			(6,115	)
Reduction of Capital Reserve		—		—		(52,361	)		—			52,361			—

As of September 30, 2022		2,477,672		21,198		619,470			11,761			160,616			813,045

	Common shares		Common stock		Additional paid- in- capital			Accumulated other comprehensive income/(loss)			Retained earnings (deficit)			Total shareholders’ equity
Nine months ended September 30, 2023
As of January 1, 2023		2,477,672		21,198		359,280			19,360			226,388			626,226
Net income		—		—		—			—			74,959			74,959
Pension adjustments, net of tax		—		—		—			(156	)		—			(156	)
Loss on foreign currency translation, net of tax		—		—		—			(3,168	)		—			(3,168	)

As of September 30, 2023		2,477,672		21,198		359,280			16,036			301,346			697,860
Nine months ended September 30, 2022
As of January 1, 2022		2,477,672		21,198		671,831			23,033			147,816			863,878
Net loss		—		—		—			—			(39,561	)		(39,561	)
Pension adjustments, net of tax		—		—		—			(185	)		—			(185	)
Loss on foreign currency translation, net of tax		—		—		—			(11,087	)		—			(11,087	)
Reduction of Capital Reserve		—		—		(52,361	)		—			52,361			—

As of September 30, 2022		2,477,672		21,198		619,470			11,761			160,616			813,045

See accompanying notes to consolidated financial statements.

DoubleDown Interactive Co., Ltd.

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands of U.S. Dollars)


	Nine months ended September 30,
	2023			2022
Cash flow from (used in) operating activities:
Net income (loss)	$	74,959		$	(39,561	)
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		158			3,751
Gain on foreign currency remeasurement		(1,484	)		(16,163	)
Loss on short-term investments		76			155
Deferred taxes		21,110			(26,716	)
Working capital adjustments:
Accounts receivable		(6,847	)		703
Prepaid expenses, other current and non-current assets		1,090			(1,391	)
Accounts payable, accrued expenses and other payables		(3,381	)		1,033
Contract liabilities		(382	)		(80	)
Income tax payable		15			—
Loss Contingency		(95,250	)		141,750
Other current and non-current liabilities		1,055			8,215

Net cash flows from (used in) operating activities	$	(8,881	)	$	71,696
Cash flow from (used in) investing activities:
Purchases of intangible assets		—			(3	)
Purchases of property and equipment		(173	)		(164	)
Disposals of property and equipment					27
Issuance of note receivable		(1,086	)		—
Purchases of short-term investments		(47,465	)		(366,449	)
Sales of short-term investments		75,633			366,293

Net cash flows from (used in) investing activities	$	26,909		$	(296	)
Cash flow from (used in) financing activities:

Net cash flows from (used in) financing activities:	$	—		$	—
Net foreign exchange difference on cash and cash equivalents		(1,444	)		(2,992	)

Net decrease in cash and cash equivalents	$	16,584		$	68,408

Cash and cash equivalents at beginning of period	$	217,352		$	242,060
Cash and cash equivalents at end of period	$	233,936		$	310,468
Cash paid during year for:
Interest		—			—
Income taxes	$	20		$	11,415

See accompanying notes to consolidated financial statements.

DoubleDown Interactive Co., Ltd.

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1: Description of business

Background and nature of operations

DoubleDown Interactive Co., Ltd. (“DDI,” “we,” “us,” “our” or the “Company”) was incorporated in 2008 in Seoul, Korea as an interactive entertainment studio, focused on the development and publishing of casual games and mobile applications. DDI is a subsidiary of DoubleU Games Co., Ltd. (“DUG” or “DoubleU Games”), a Korean company and our controlling shareholder holding 67.1% of our outstanding shares. The remaining 32.9% of our outstanding shares are held by STIC Special Situation Private Equity Fund (“STIC”, 20.2%) and the remainder by participants in our IPO (12.7%). In 2017, DDI acquired DoubleDown Interactive, LLC

(“DDI-US”)

from International Gaming Technologies (“IGT”) for approximately $825 million.

DDI-US,

with its principal place of business located in Seattle, Washington, is our primary revenue-generating entity.

We develop and publish digital gaming content on various mobile and web platforms through our multi-format interactive

all-in-one

game experience concept. We host

DoubleDown Casino, DoubleDown Classic, DoubleDown Fort Knox and Undead World

within various formats.

The American Depositary Shares, each representing 0.05 share of our common share, trade on the NASDAQ Stock Market under the symbol “DDI.”

Capital Reserve Reallocation

On August 26, 2022, the shareholders approved the reduction of the Company’s capital reserve in the amount of

70,000,000,000 pursuant to Article

461-2

of the Korean Commercial Code at an Extraordinary General Meeting of Shareholders.

On December 28, 2022, the shareholders approved the reduction of the Company’s capital reserve in the amount of

330,000,000,000 pursuant to Article

461-2

of the Korean Commercial Code at an Extraordinary General Meeting of Shareholders.

Basis of preparation and consolidation

Our unaudited condensed consolidated financial statements include all adjustments of a normal, recurring nature necessary for the fair presentation of the results for the interim periods presented. The results for the interim period presented are not necessarily indicative of those for the full year. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements for the year ended December 31, 2022.

The condensed consolidated financial statements include the balances and accounts of DDI and our controlled subsidiaries. All significant inter-company transactions, balances and unrealized gains or losses have been eliminated. We view our operations and manage our business as one operating segment.

Use of estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures. We regularly evaluate estimates and assumptions related to provisions for income taxes, revenue recognition, expense accruals, deferred income tax asset valuation allowances, valuation of goodwill and intangibles, and legal contingencies. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and the actual results, future operating results may be affected.

Functional currency and translation of financial statements

Our functional currency is the Korean Won (“KRW”) and the U.S. Dollar (“dollar,” “USD,” “US$,” or “$”) is the functional currency of our United States subsidiaries. The accompanying consolidated financial statements are presented in USD. The consolidated balance sheets have been translated at the exchange rates prevailing at each balance sheet date. The consolidated statement of comprehensive income and statement of cash flows have been translated using the weighted-average exchange rates prevailing during the periods of each statement. The equity capital is denominated in the functional currency, KRW, and is translated at historical exchange rates. All translation adjustments resulting from translating into the reporting currency are accumulated as a separate component of accumulated other comprehensive income in shareholders’ equity. Gains or losses resulting from foreign currency transactions are included in other income (expense).

Intercompany monetary items denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date with the gain or loss arising on translation recorded to other income (expense). Intercompany

non-monetary

items that are measured at historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

Cash and cash equivalents

We consider all money market funds and short-term investments with a maturity of three months or less when acquired to be cash and cash equivalents. Cash and cash equivalents are held by high credit quality financial institutions and balances may exceed limits of federal insurance. We have not experienced any losses resulting from these excess deposits.

Financial instruments and concentration of credit risk

Financial instruments, which potentially expose us to concentrations of credit risk, consist primarily of cash and cash equivalents, accounts receivable and short-term investments.

Accounts receivable are recorded and carried at the net invoiced amount, which is net of platform payment processing fees, unsecured, and represent amounts due to us based on contractual obligations where an executed contract exists. We do not require collateral and have not recognized an allowance as management estimates the net receivable is fully collectible. Apple, Inc. (“Apple”), Facebook, Inc. (“Facebook”), and Google, LLC (“Google”) represent significant distribution, marketing, and payment platforms for our games. A substantial portion of our revenue was generated from players who accessed our games through these platforms and a significant concentration of our accounts receivable balance is comprised of balances owed to us by these platforms.

The following table summarizes the percentage of revenues and accounts receivable generated via our platform providers in excess of 10% of our total revenues and total accounts receivable:


	Revenue Concentration
	Three months ended September 30,						Nine months ended September 30,
	2023			2022			2023			2022
Apple		56.5	%		54.1	%		55.7	%		54.2	%
Facebook		16.2	%		24.2	%		17.2	%		24.2	%
Google		18.1	%		18.6	%		18.6	%		18.7	%


	Accounts Receivable Concentration
	As of September 30,			As of December 31,
	2023			2022
Apple		62.5	%		55.8	%
Facebook		9.4	%		20.4	%
Google		10.5	%		17.7	%

Note 2: Revenue from Contracts with Customers

Our social and mobile apps operate on a

free-to-play

model, whereby game players may collect virtual currency free of charge through the passage of time or through targeted marketing promotions. If a game player wishes to obtain virtual currency above and beyond the level of free virtual currency available to that player, the player may purchase additional virtual currency. Once a purchase is completed, the virtual currency is deposited into the player’s account and is not separately identifiable from previously purchased virtual currency or virtual currency obtained by the game player for free.

Once obtained, virtual currency (either free or purchased) cannot be redeemed for cash nor exchanged for anything other than gameplay within our apps. When virtual currency is played on any of our games, the game player could “win” and would be awarded additional virtual currency or could “lose” and lose the future use of that virtual currency. We have concluded that our virtual currency represents consumable goods, because the game player does not receive any additional benefit from the games and is not entitled to any additional rights once the virtual currency is substantially consumed.

Control transfers when the virtual currency is consumed for gameplay. We recognize revenue from player purchases of virtual currency based on the consumption of this currency. We determined through a review of play behavior that game players generally do not purchase additional virtual currency until their existing virtual currency balances, regardless of source (e.g., bonus currency, gifted currency through social media channels, daily free chips, etc.), have been substantially consumed.

Based on an analysis of customers’ historical play behavior, purchase behavior, and the amount of virtual currency outstanding, we are able to estimate the rate that virtual currency is consumed during gameplay. Accordingly, revenue is recognized using a user-based revenue model with the period between purchases representing the timing difference between virtual currency purchase and consumption. This timing difference is relatively short.

We continuously gather and analyze detailed customer play behavior and assess this data in relation to our judgments used for revenue recognition.

We generate a small portion of our revenue from subscription services. All monthly subscription fees are prepaid and

non-refundable

for a

one-month

period and auto-renew until the end customer terminates the service with the platform provider the subscription services originated. The subscription revenue is recognized on a daily basis beginning on the original date of purchase and has no impact on a customer purchased virtual currency.

Disaggregation of revenue

We believe disaggregation of our revenue based on platform and geographical location are appropriate categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

The following table represents our disaggregation of revenue between mobile and web platforms (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Mobile	$	61,130	$	59,150	$	186,928	$	184,033
Web		11,853		19,651		38,838		60,824

Total	$	72,983	$	78,801	$	225,766	$	244,857

The following table presents our revenue disaggregated based on the geographical location of our players (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
U.S. (1)	$	63,719	$	70,044	$	197,551	$	214,394
International		9,264		8,757		28,215		30,463

Total	$	72,983	$	78,801	$	225,766	$	244,857

(1)	Geographic location is presented as being derived from the U.S. when data is not available.

Principal-agent considerations

Our revenue contracts are with game players who are our customers. We have exclusive control over all content, pricing, and overall functionality of games accessed by players. Our games are played on various third-party platforms for which the platform providers collect proceeds from our customers and remit us an amount after deducting a fee for processing and other agency services. We record revenue at the gross amount charged to our customers and classify fees paid to platform providers (such as Apple, Facebook, and Google) within cost of revenue, contract assets, contract liabilities and other disclosures.

Contract assets, contract liabilities and other disclosures

Customer payments are based on the payment terms established in our contracts. Payments for purchase of virtual currency are required at time of purchase, are

non-refundable

and relate to

non-cancellable

contracts that specify our performance obligations. All payments are initially recorded as revenue, as the player has no right of return after the purchase, consistent with our standard terms and conditions. Based on our analysis, at each period end, we estimate the number of days to consume virtual currency. This represents the revenue amount where the performance obligation has not been met and is deferred as a contract liability until we satisfy the obligation. The contract asset consists of platform fees for which revenue has not been recognized. For subscription revenue, the remaining portion of the daily ratable monthly subscription is recorded as a contract liability and the applicable platform fees as a contract asset.

The following table summarized our opening and closing balances in contract assets and contract liabilities (in thousands):


	As of September 30,		As of December 31,
	2023		2022
Contract assets (1)	$	613	$	728
Contract liabilities		2,044		2,426

(1)	Contract assets are included within prepaid expenses and other assets in our consolidated balance sheet.

Note 3: Short-term investments

The Company holds investments in marketable securities with the intention of selling these investments within a relatively short period of time

(3-6

months). As such, gains or losses from holding or trading these securities were recognized in the Statements of Income. At September 30, 2023, short term investments comprised of fixed time deposits classified as trading.

Note 4: Goodwill and intangible assets

There were no changes to the carrying amount of goodwill in the three months and nine months ended September 30, 2023. We recognized an aggregate $269.9 million impairment of goodwill and intangibles in 2022. Changes in the carrying amount of intangible assets were as follows (in thousands):


			September 30, 2023										December 31, 2022
	Useful life		Gross amount		Accumulated amortization			Impairment			Net amount		Gross amount		Accumulated amortization			Impairment			Net amount
Goodwill		indefinite	$	633,965	$	—		$	(254,893	)	$	379,072	$	633,965	$	—		$	(254,893	)	$	379,072
Trademarks		indefinite		50,000		—			(15,000	)		35,000		50,000		—			(15,000	)		35,000
Customer relationships		4 years		75,000		(75,000	)		—			—		75,000		(75,000	)		—			—
Purchased technology		5 years		45,423		(45,423	)		—			—		45,423		(45,423	)		—			—
Development costs		3 years		9,486		(9,486	)		—			—		9,486		(9,486	)		—			—
Software		4 years		2,467		(2,421	)		—			46		2,462		(2,411	)		—			51

Total			$	816,341	$	(132,330	)	$	(269,893	)	$	414,118	$	816,336	$	(132,320	)	$	(269,893	)	$	414,123

The following reflects amortization expense related to intangible assets included with depreciation and amortization (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Amortization Expense	$	4.2	$	3.7	$	12.5	$	3,624

Note 5: Debt

The components of debt at September 30, 2023 and December 31, 2022 are as follows (in thousands):


	As of September 30,		As of December 31,
	2023		2022
4.60% Senior Notes due to related party due 2024	$	37,180	$	39,454

Total debt		37,180		39,454
Less: Short-term debt		37,180		—

Total Long-term debt	$	—	$	39,454

4.60% Senior Notes due to related party due 2024

The 4.60% Senior Notes due to related party, which collectively total KRW100 billion (US$74 million) at inception, accrue 4.60% interest quarterly on the outstanding principal amount until maturity. Interest and principal are due in full at maturity (May 27, 2024).

Note 6: Fair value measurements

The carrying values of our accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities and short-term borrowings approximate their fair values due to the short-term nature of these instruments.

Our cash equivalents (Level 1 of fair value hierarchy) consist of money market funds and Korean government bonds totaling $233.9 million, and short-term investments (Level 2 of fair value hierarchy) comprised of fixed time or certificates of deposit with maturity periods greater than 90 days totaling $37.2 million as of September 30, 2023. As of December 31, 2022, our cash equivalents (Level 1 of fair value hierarchy) consisted of money market funds and Korean government bonds totaling $217.4 million, and short-term investments (Level 2 of fair value hierarchy) comprised of fixed time or certificates of deposit with maturity periods greater than 90 days totaling $67.9 million. We rely on credit market data to track interest rates for other entities with similar risk profiles.

We record all debt at inception at fair value. We perform subsequent analysis on available data to evaluate the fair value of our borrowing as of the balance sheet date. We rely on credit market data to track interest rates for other entities with similar risk profiles. As of September 30, 2023, we believe the fair value of our senior notes (a Level 3 estimate) would be $1.1 million lower than face value due to the overall increase in interest rates during the past year. We do not believe the difference between carrying value and fair value has changed materially due to foreign exchange exposure or our credit worthiness.

Note 7: Income taxes

We are subject to federal and state income taxes in Korea and the United States. We account for our provision for income taxes in accordance with ASC 740, Income Taxes, which requires an estimate of the annual effective tax rate for the full year to be applied to the interim period, taking into

account year-to-date amounts

and projected results for the full year.

Our effective tax rate varies from the statutory Korean income tax rate due to the effect of foreign rate differential, withholding taxes, state and local income taxes, research and development credits, and a valuation allowance on Korean deferred tax assets. Our effective tax rate could fluctuate significantly from quarter to quarter based on variations in the estimated and actual level

of pre-tax income

or loss by jurisdiction, changes in enacted tax laws and regulations, and changes in estimates

regarding non-deductible expenses

and tax credits. As of September 30, 2023, and December 31, 2022, we have provided a valuation allowance against certain foreign net deferred tax assets that we believe, based on the weight of available evidence, are not more likely than not to be realized.

The income tax expense of $7.8 million for the three months ended September 30, 2023, reflects an effective tax rate of 22.4% which is higher than the effective tax rate of 17.0% for the three months ended September 30, 2022. The increase in rate from 2022 to 2023 is primarily due to foreign currency gains.

The effective tax rate of 22.8% for the nine months ended September 30, 2023, is higher than the Korean statutory rate of 19%, primarily due to foreign rate differential and state taxes. The effective rate of 22.8% includes a change in the state tax rate and withholding taxes.

Note 8: Net income per share

Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities. Diluted net income per share is computed by dividing net income by the weighted-average number of common shares and dilutive common share equivalents outstanding for the period determined using the treasury-stock

and if-converted methods.

There were no potentially dilutive securities outstanding in either period presented.

Note 9: Leases

We are lessee for corporate office space in Seattle, Washington and Seoul, Korea. The lessor for our Seoul, Korea leases is our parent, DoubleU Games (see Note 12). Our leases have remaining terms of thirteen to sixty months. We do not have any finance leases. Our total variable and short-term lease payments are immaterial for all periods presented.

The Seattle, Washington lease originated in July 2012 and consists of 49,375 square feet. The lease will expire in October 2024.

In September 2023, we executed a new sublease with our parent, DUG, for 28,497 square feet of office space

in Gangnam-gu, Seoul,

Korea. The lease term commences in October 2023, and will expire in September 2028.

Supplemental balance sheet and cash flow information related to operating leases is as follows (in thousands):


	As of September 30, 2023		As of December 31, 2022
Operating lease right-of-use asset	$	2,196	$	4,675
Accrued rent		470		817

Total operating lease right-of-use asset, net	$	1,726	$	3,858

Short-term operating lease liabilities		2,020		3,050
Long-term operating lease liabilities		176		1,625

Total operating lease liabilities	$	2,196	$	4,675

Supplemental cash flow information related to leases was as follows (in thousands):


	Nine months ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	2,547	$	2,352

Note 10: Accumulated other comprehensive income

Changes in accumulated other comprehensive income (AOCI) by component for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):


Three months ended September 30, 2023	Currency Translation Adjustments			Defined Benefit Pension Plan			Total
Balance at July 1, 2023	$	19,444		$	(1,540	)	$	17,904
Foreign currency translation loss, net of tax		(1,821	)		—			(1,821	)
Actuarial gain/(loss), net of tax		—			(48	)		(48	)

Balance as of September 30, 2023	$	17,624		$	(1,588	)	$	16,036


Three months ended September 30, 2022	Currency Translation Adjustments			Defined Benefit Pension Plan			Total
Balance at July 1, 2022	$	19,339		$	(1,565	)	$	17,774
Foreign currency translation loss, net of tax		(6,115	)		—			(6,115	)
Actuarial gain/(loss), net of tax		—			102			102

Balance as of September 30, 2022	$	13,224		$	(1,463	)	$	11,761


Nine months ended September 30, 2023	Currency Translation Adjustments			Defined Benefit Pension Plan			Total
Balance at January 1, 2023	$	20,792		$	(1,432	)	$	19,360
Foreign currency translation loss, net of tax		(3,168	)		—			(3,168	)
Actuarial gain/(loss), net of tax		—			(156	)		(156	)

Balance as of September 30, 2023	$	17,624		$	(1,588	)	$	16,036


Nine months ended September 30, 2022	Currency Translation Adjustments			Defined Benefit Pension Plan			Total
Balance at January 1, 2022	$	24,311		$	(1,278	)	$	23,033
Foreign currency translation loss, net of tax		(11,087	)		—			(11,087	)
Actuarial gain/(loss), net of tax		—			(185	)		(185	)

Balance as of September 30, 2022	$	13,224		$	(1,463	)	$	11,761

We do not tax effect foreign currency translation gain/(loss) because we have determined such gain/(loss) is permanently reinvested and actuarial gain/(loss) is not tax effected due to a valuation allowance applied to our deferred tax assets.

Note 11: Commitments and contingencies

Legal contingencies

On April 12, 2018, a class-action lawsuit was filed against

DDI-US

demanding a return of unfair benefit under the pretext that the Company’s social casino games are not legal in the State of Washington, United States. Similar class-action lawsuits were concurrently filed with certain of our competitors, certain of which, announced settlements which the court has recently approved. On April 25, 2021, plaintiffs filed their Second Amended Complaint, changing their allegations to include an additional corporate entity of

co-defendant,

IGT.

IGT tendered its defense of the lawsuit to

DDI-US

and sought indemnity for any damages from the lawsuit, based on various agreements associated with IGT’s sale of

DDI-US.

DDI-US

had previously tendered its defense to IGT and sought indemnity from it.

On August 29, 2022,

DDI-US

entered into an agreement in principle to settle the aforementioned

Benson

class action and associated proceedings, pursuant to which, among other things, IGT and

DDI-US

would contribute $269.75 million and $145.25 million, respectively, to the settlement fund. This agreement in principle received final court approval with the final contribution to the settlement fund made in June, 2023. The Company had an accrual of $95.25 million for the year ended December 31, 2022, which was cleared by a $95.25 million payment in the second quarter of 2023.

Publishing and license agreements

DoubleU Games

We entered into the DoubleU Games License Agreement on March 7, 2018, and it was subsequently amended on July 1, 2019 and November 27, 2019. Pursuant to the DoubleU Games License Agreement, DoubleU Games grants us an exclusive license to develop and distribute certain DoubleU Games social casino game titles and sequels thereto in the social online game field of use. We are obligated to pay a royalty license fee to DoubleU Games in connection with these rights, with certain customary terms and conditions. The agreement remains in effect until either DUG no longer holds an interest, directly or indirectly, in DDI, or DDI no longer holds an interest, directly or indirectly, in

DDI-US.

In such event, the agreement provides that the parties will mutually renegotiate the terms of the agreement. As of September 30, 2023, we licensed approximately 49 game titles under the terms of this agreement.

International Gaming Technologies (“IGT”)

In 2017, we entered into a Game Development, Distribution, and Services agreement with IGT, and it was subsequently amended on January 1, 2019. Under the terms of the agreement, IGT will deliver game assets so that we can port (a process of converting the assets into functioning slot games by platform) the technology for inclusion in our gaming apps. The agreement includes game assets that are used to create new games. Under the agreement, we pay IGT a royalty rate of 7.5% of revenue for their proprietary assets and 15% of revenue for third-party game asset types. We also pay a monthly fee for porting. The initial term of the agreement is ten (10) years with up to two additional five-year periods. Costs incurred in connection with this agreement for the three months ended September 30, 2023 and 2022 totaled $1.5 million and $2.2 million, respectively, and are recognized as a component of cost of revenue. Costs incurred in connection with this agreement for the nine months ended September 30, 2023 and 2022 totaled $5.4 million and $7.2 million, respectively, and are recognized as a component of cost of revenue.

Note 12: Related party transactions

Our related party transactions comprise of expenses for use of intellectual property, borrowings, and sublease previously described. We may also incur other expenses with related parties in the ordinary course of business, which are included in the consolidated financial statements.

The following is a summary of expenses charged by our parent, DoubleU Games (in thousands):


	Three months ended September 30,				Nine months ended September 30,				Statement of
	2023		2022		2023		2022		Income and Comprehensive Income Line Item
Royalty expense (see Note 11)	$	513	$	832	$	1,963	$	2,522	Cost of revenue
Interest expense (see Note 5)		442		431		1,323		1,356	Interest expense
Rent expense (see Note 9)		308		300		932		955	General and administrative expense
Other expense		41		59		176		173	General and administrative expense

Amounts due to our parent, DUG, are as follows (in thousands):


	At September 30,		At December 31,		Statement of Consolidated
	2023		2022		Balance Sheet Line Item
4.6% Senior Notes with related party	$	37,180	$	—	Current portion of borrowings with related party
4.6% Senior Notes with related party		—		39,454	Long-Term borrowing with related party
Royalties and other expenses		176		315	A/P and accrued expenses
Short-term lease liability		—		1,066	Short-term operating lease liabilities
Accrued interest on 4.6% Senior Notes with related party		8,679		7,852	Other non-current labilities
Long-term lease liability		—		—	Long-term lease liabilities

Note 13: Defined benefit pension plan

We operate a defined benefit pension plan under employment regulations in Korea. The plan services the employees located in Seoul and is a final wage-based pension plan, which provides a specified amount of pension benefit based on length of service. The total benefit obligation of $3.6 million and $4.0 million was included in other

non-current

liabilities as of September 30, 2023 and December 31, 2022, respectively, and the change in actuarial gains or losses, which is not significant, was included in other comprehensive income. The plan is funded.

Note 14: Subsequent Event

On October 31, 2023, the Company closed its previously announced acquisition of iGaming operator, SuprNation AB (“SuprNation”), for a total cash consideration €34.3 million (or approximately $36.5 million based on an exchange rate of €1 = $1.064 as of October 27, 2023). The acquisition diversifies the digital games categories that the Company addresses with the addition of three real-money iGaming sites in Western Europe. Following the closing, SuprNation AB is now a direct, wholly-owned subsidiary of DDI-US. Due to the recency of the transaction, it was impracticable to reflect the acquisition of SuprNation in the Company’s third quarter financials.

Cover Page	9 Months Ended
Cover Page	Sep. 30, 2023
Document Information [Line Items]
Document Type	6-K
Amendment Flag	false
Document Period End Date	Sep. 30, 2023
Entity Registrant Name	DoubleDown Interactive Co., Ltd.
Entity Central Index Key	0001799567
Current Fiscal Year End Date	--12-31

Condensed Consolidated Statements of Income and Comprehensive Income - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Income Statement [Abstract]

General and administrative

$ 72,983

$ 78,801

$ 225,766

$ 244,857

Operating expenses:

Cost of revenue

^[1]

23,658

27,119

74,282

83,464

Sales and marketing

^[1]

10,585

17,214

39,733

55,056

Research and development

^[1]

4,361

4,691

14,473

13,704

^[1]

4,644

4,821

14,526

15,771

Loss contingency

^[1]

70,250

141,750

Depreciation and amortization

158

3,751

Total operating expenses

43,303

124,140

143,172

313,496

Operating income (loss)

29,680

(45,339)

82,594

(68,639)

Other income (expense):

Interest expense

(443)

(431)

(1,341)

(1,356)

Interest income

3,132

1,948

10,511

2,742

Gain on foreign currency transactions

1,177

541

3,907

856

Gain on foreign currency remeasurement

1,096

8,748

1,484

16,163

Gain (loss) on short-term investments

(7)

5,651

(76)

(155)

Other, net

(42)

(4)

(98)

Total other income (expense), net

5,046

16,415

14,481

18,152

Income (loss) before income tax

34,726

(28,924)

97,075

(50,487)

Income tax (expense) benefit

(7,796)

4,925

(22,116)

10,926

Net income (loss)

26,930

(23,999)

74,959

(39,561)

Other comprehensive income (expense):

Pension adjustments, net of tax

(48)

102

(156)

(185)

Loss on foreign currency translation

(1,821)

(6,115)

(3,168)

(11,087)

Comprehensive income (loss)

$ 25,061

$ (30,012)

$ 71,635

$ (50,833)

Earnings (loss) per share:

Basic

$ 10.87

$ (9.69)

$ 30.25

$ (15.97)

Diluted

$ 10.87

$ (9.69)

$ 30.25

$ (15.97)

Weighted average shares outstanding:

Basic

2,477,672

Diluted

2,477,672

[1]	Excluding depreciation and amortization.

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 233,936	$ 217,352
Short-term investments	37,231	67,891
Accounts receivable, net	27,834	21,198
Prepaid expenses, and other assets	6,307	6,441
Total current assets	305,308	312,882
Property and equipment, net	440	436
Operating lease right-of-use assets, net	1,726	3,858
Intangible assets, net	35,046	35,051
Goodwill	379,072	379,072
Deferred tax asset	37,683	59,290
Other non-current assets	1,308	1,463
Total assets	760,583	792,052
Current liabilities:
Accounts payable and accrued expenses	10,358	13,830
Short-term operating lease liabilities	2,020	3,050
Income taxes payable	15	0
Contract liabilities	2,044	2,426
Loss contingency	0	95,250
Current portion of borrowings with related party	37,180	0
Other current liabilities	1,158	1,926
Total current liabilities	52,775	116,482
Long-term operating lease liabilities	176	1,625
Other non-current liabilities	9,772	8,265
Total liabilities	62,723	165,826
Shareholders' equity
Common stock, KRW 10,000 par value - 200,000,000 Shares authorized; 2,477,672 issued and outstanding	21,198	21,198
Additional paid-in-capital	359,280	359,280
Accumulated other comprehensive income	16,036	19,360
Retained earnings	301,346	226,388
Total shareholders' equity	697,860	626,226
Total liabilities and shareholders' equity	760,583	792,052
Related Party [Member]
Current liabilities:
Other non-current liabilities	$ 0	$ 39,454

Condensed Consolidated Balance Sheets (Parenthetical) - ₩ / shares	Sep. 30, 2023	Dec. 31, 2022
Common Stock, Par or Stated Value Per Share	₩ 10,000	₩ 10,000
Common Stock, Shares Authorized	200,000,000	200,000,000
Common Stock, Shares, Issued	2,477,672	2,477,672
Common Stock, Shares, Outstanding	2,477,672	2,477,672

Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Total	Common stock [Member]	Additional paid-in-capital [Member]	Accumulated other comprehensive income/(loss) [Member]	Retained earnings (Deficit) [Member]
Beginning balance at Dec. 31, 2021	$ 863,878	$ 21,198	$ 671,831	$ 23,033	$ 147,816
Beginning balance (in shares) at Dec. 31, 2021		2,477,672
Net income (loss)	(39,561)				(39,561)
Pension adjustments, net of tax	(185)			(185)
Loss on foreign currency translation, net of tax	(11,087)			(11,087)
Reduction of capital reserve			(52,361)		52,361
Ending balance at Sep. 30, 2022	813,045	$ 21,198	619,470	11,761	160,616
Ending balance (in shares) at Sep. 30, 2022		2,477,672
Beginning balance at Jun. 30, 2022	843,057	$ 21,198	671,831	17,774	132,254
Beginning balance (in shares) at Jun. 30, 2022		2,477,672
Net income (loss)	(23,999)				(23,999)
Pension adjustments, net of tax	102			102
Loss on foreign currency translation, net of tax	(6,115)			(6,115)
Reduction of capital reserve			(52,361)		52,361
Ending balance at Sep. 30, 2022	813,045	$ 21,198	619,470	11,761	160,616
Ending balance (in shares) at Sep. 30, 2022		2,477,672
Beginning balance at Dec. 31, 2022	626,226	$ 21,198	359,280	19,360	226,388
Beginning balance (in shares) at Dec. 31, 2022		2,477,672
Net income (loss)	74,959				74,959
Pension adjustments, net of tax	(156)			(156)
Loss on foreign currency translation, net of tax	(3,168)			(3,168)
Ending balance at Sep. 30, 2023	697,860	$ 21,198	359,280	16,036	301,346
Ending balance (in shares) at Sep. 30, 2023		2,477,672
Beginning balance at Jun. 30, 2023	672,799	$ 21,198	359,280	17,905	274,416
Beginning balance (in shares) at Jun. 30, 2023		2,477,672
Net income (loss)	26,930				26,930
Pension adjustments, net of tax	(48)			(48)
Loss on foreign currency translation, net of tax	(1,821)			(1,821)
Ending balance at Sep. 30, 2023	$ 697,860	$ 21,198	$ 359,280	$ 16,036	$ 301,346
Ending balance (in shares) at Sep. 30, 2023		2,477,672

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flow from (used in) operating activities:
Net income (loss)	$ 74,959	$ (39,561)
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	158	3,751
Gain on foreign currency remeasurement	(1,484)	(16,163)
Loss on short-term investments	76	155
Deferred taxes	21,110	(26,716)
Working capital adjustments:
Accounts receivable	(6,847)	703
Prepaid expenses, other current and non-current assets	1,090	(1,391)
Accounts payable, accrued expenses and other payables	(3,381)	1,033
Contract liabilities	(382)	(80)
Income tax payable	15	0
Loss contingency	(95,250)	141,750
Other current and non-current liabilities	1,055	8,215
Net cash flows from (used in) operating activities	(8,881)	71,696
Cash flow from (used in) investing activities:
Purchases of intangible assets	0	(3)
Purchases of property and equipment	(173)	(164)
Disposals of property and equipment		27
Issuance of note receivable	(1,086)	0
Purchases of short-term investments	(47,465)	(366,449)
Sales of short-term investments	75,633	366,293
Net cash flows from (used in) investing activities	26,909	(296)
Cash flow from (used in) financing activities:
Net cash flows from (used in) financing activities:	0	0
Net foreign exchange difference on cash and cash equivalents	(1,444)	(2,992)
Net decrease in cash and cash equivalents	16,584	68,408
Cash and cash equivalents at beginning of period	217,352	242,060
Cash and cash equivalents at end of period	233,936	310,468
Cash paid during year for:
Interest	0	0
Income taxes	$ 20	$ 11,415

Description of Business

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of business

Note 1: Description of business

Background and nature of operations

(“DDI-US”)

from International Gaming Technologies (“IGT”) for approximately $825 million.

DDI-US,

with its principal place of business located in Seattle, Washington, is our primary revenue-generating entity.

We develop and publish digital gaming content on various mobile and web platforms through our multi-format interactive

all-in-one

game experience concept. We host

DoubleDown Casino, DoubleDown Classic, DoubleDown Fort Knox and Undead World

within various formats.

The American Depositary Shares, each representing 0.05 share of our common share, trade on the NASDAQ Stock Market under the symbol “DDI.”

Capital Reserve Reallocation

On August 26, 2022, the shareholders approved the reduction of the Company’s capital reserve in the amount of

70,000,000,000 pursuant to Article

461-2

of the Korean Commercial Code at an Extraordinary General Meeting of Shareholders.

On December 28, 2022, the shareholders approved the reduction of the Company’s capital reserve in the amount of

330,000,000,000 pursuant to Article

461-2

of the Korean Commercial Code at an Extraordinary General Meeting of Shareholders.

Basis of preparation and consolidation

Use of estimates

Functional currency and translation of financial statements

non-monetary

items that are measured at historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

Cash and cash equivalents

Financial instruments and concentration of credit risk

Financial instruments, which potentially expose us to concentrations of credit risk, consist primarily of cash and cash equivalents, accounts receivable and short-term investments.

The following table summarizes the percentage of revenues and accounts receivable generated via our platform providers in excess of 10% of our total revenues and total accounts receivable:


	Revenue Concentration
	Three months ended September 30,						Nine months ended September 30,
	2023			2022			2023			2022
Apple		56.5	%		54.1	%		55.7	%		54.2	%
Facebook		16.2	%		24.2	%		17.2	%		24.2	%
Google		18.1	%		18.6	%		18.6	%		18.7	%


	Accounts Receivable Concentration
	As of September 30,			As of December 31,
	2023			2022
Apple		62.5	%		55.8	%
Facebook		9.4	%		20.4	%
Google		10.5	%		17.7	%

Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Note 2: Revenue from Contracts with Customers

Our social and mobile apps operate on a

free-to-play

We continuously gather and analyze detailed customer play behavior and assess this data in relation to our judgments used for revenue recognition.

We generate a small portion of our revenue from subscription services. All monthly subscription fees are prepaid and

non-refundable

for a

one-month

Disaggregation of revenue

The following table represents our disaggregation of revenue between mobile and web platforms (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Mobile	$	61,130	$	59,150	$	186,928	$	184,033
Web		11,853		19,651		38,838		60,824

Total	$	72,983	$	78,801	$	225,766	$	244,857

The following table presents our revenue disaggregated based on the geographical location of our players (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
U.S. (1)	$	63,719	$	70,044	$	197,551	$	214,394
International		9,264		8,757		28,215		30,463

Total	$	72,983	$	78,801	$	225,766	$	244,857

(1)	Geographic location is presented as being derived from the U.S. when data is not available.

Principal-agent considerations

Contract assets, contract liabilities and other disclosures

Customer payments are based on the payment terms established in our contracts. Payments for purchase of virtual currency are required at time of purchase, are

non-refundable

and relate to

non-cancellable

The following table summarized our opening and closing balances in contract assets and contract liabilities (in thousands):


	As of September 30,		As of December 31,
	2023		2022
Contract assets (1)	$	613	$	728
Contract liabilities		2,044		2,426

(1)	Contract assets are included within prepaid expenses and other assets in our consolidated balance sheet.

Short-term investments	9 Months Ended
Short-term investments	Sep. 30, 2023
Short-Term Investments [Abstract]
Short-term investments	Note 3: Short-term investments The Company holds investments in marketable securities with the intention of selling these investments within a relatively short period of time (3-6 months). As such, gains or losses from holding or trading these securities were recognized in the Statements of Income. At September 30, 2023, short term investments comprised of fixed time deposits classified as trading.

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and intangible assets

Note 4: Goodwill and intangible assets


			September 30, 2023										December 31, 2022
	Useful life		Gross amount		Accumulated amortization			Impairment			Net amount		Gross amount		Accumulated amortization			Impairment			Net amount
Goodwill		indefinite	$	633,965	$	—		$	(254,893	)	$	379,072	$	633,965	$	—		$	(254,893	)	$	379,072
Trademarks		indefinite		50,000		—			(15,000	)		35,000		50,000		—			(15,000	)		35,000
Customer relationships		4 years		75,000		(75,000	)		—			—		75,000		(75,000	)		—			—
Purchased technology		5 years		45,423		(45,423	)		—			—		45,423		(45,423	)		—			—
Development costs		3 years		9,486		(9,486	)		—			—		9,486		(9,486	)		—			—
Software		4 years		2,467		(2,421	)		—			46		2,462		(2,411	)		—			51

Total			$	816,341	$	(132,330	)	$	(269,893	)	$	414,118	$	816,336	$	(132,320	)	$	(269,893	)	$	414,123

The following reflects amortization expense related to intangible assets included with depreciation and amortization (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Amortization Expense	$	4.2	$	3.7	$	12.5	$	3,624

Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Debt

Note 5: Debt

The components of debt at September 30, 2023 and December 31, 2022 are as follows (in thousands):


	As of September 30,		As of December 31,
	2023		2022
4.60% Senior Notes due to related party due 2024	$	37,180	$	39,454

Total debt		37,180		39,454
Less: Short-term debt		37,180		—

Total Long-term debt	$	—	$	39,454

4.60% Senior Notes due to related party due 2024

Fair value measurements	9 Months Ended
Fair value measurements	Sep. 30, 2023
Fair Value Disclosures [Abstract]
Fair value measurements	Note 6: Fair value measurements The carrying values of our accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities and short-term borrowings approximate their fair values due to the short-term nature of these instruments. Our cash equivalents (Level 1 of fair value hierarchy) consist of money market funds and Korean government bonds totaling $233.9 million, and short-term investments (Level 2 of fair value hierarchy) comprised of fixed time or certificates of deposit with maturity periods greater than 90 days totaling $37.2 million as of September 30, 2023. As of December 31, 2022, our cash equivalents (Level 1 of fair value hierarchy) consisted of money market funds and Korean government bonds totaling $217.4 million, and short-term investments (Level 2 of fair value hierarchy) comprised of fixed time or certificates of deposit with maturity periods greater than 90 days totaling $67.9 million. We rely on credit market data to track interest rates for other entities with similar risk profiles. We record all debt at inception at fair value. We perform subsequent analysis on available data to evaluate the fair value of our borrowing as of the balance sheet date. We rely on credit market data to track interest rates for other entities with similar risk profiles. As of September 30, 2023, we believe the fair value of our senior notes (a Level 3 estimate) would be $1.1 million lower than face value due to the overall increase in interest rates during the past year. We do not believe the difference between carrying value and fair value has changed materially due to foreign exchange exposure or our credit worthiness.

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Note 7: Income taxes We are subject to federal and state income taxes in Korea and the United States. We account for our provision for income taxes in accordance with ASC 740, Income Taxes, which requires an estimate of the annual effective tax rate for the full year to be applied to the interim period, taking into account year-to-date amounts and projected results for the full year. Our effective tax rate varies from the statutory Korean income tax rate due to the effect of foreign rate differential, withholding taxes, state and local income taxes, research and development credits, and a valuation allowance on Korean deferred tax assets. Our effective tax rate could fluctuate significantly from quarter to quarter based on variations in the estimated and actual level of pre-tax income or loss by jurisdiction, changes in enacted tax laws and regulations, and changes in estimates regarding non-deductible expenses and tax credits. As of September 30, 2023, and December 31, 2022, we have provided a valuation allowance against certain foreign net deferred tax assets that we believe, based on the weight of available evidence, are not more likely than not to be realized. The income tax expense of $7.8 million for the three months ended September 30, 2023, reflects an effective tax rate of 22.4% which is higher than the effective tax rate of 17.0% for the three months ended September 30, 2022. The increase in rate from 2022 to 2023 is primarily due to foreign currency gains. The effective tax rate of 22.8% for the nine months ended September 30, 2023, is higher than the Korean statutory rate of 19%, primarily due to foreign rate differential and state taxes. The effective rate of 22.8% includes a change in the state tax rate and withholding taxes.

Net Income Per Share	9 Months Ended
Net Income Per Share	Sep. 30, 2023
Earnings Per Share [Abstract]
Net Income Per Share	Note 8: Net income per share Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities. Diluted net income per share is computed by dividing net income by the weighted-average number of common shares and dilutive common share equivalents outstanding for the period determined using the treasury-stock and if-converted methods. There were no potentially dilutive securities outstanding in either period presented.

Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

Note 9: Leases

The Seattle, Washington lease originated in July 2012 and consists of 49,375 square feet. The lease will expire in October 2024.

In September 2023, we executed a new sublease with our parent, DUG, for 28,497 square feet of office space

in Gangnam-gu, Seoul,

Korea. The lease term commences in October 2023, and will expire in September 2028.

Supplemental balance sheet and cash flow information related to operating leases is as follows (in thousands):


	As of September 30, 2023		As of December 31, 2022
Operating lease right-of-use asset	$	2,196	$	4,675
Accrued rent		470		817

Total operating lease right-of-use asset, net	$	1,726	$	3,858

Short-term operating lease liabilities		2,020		3,050
Long-term operating lease liabilities		176		1,625

Total operating lease liabilities	$	2,196	$	4,675

Supplemental cash flow information related to leases was as follows (in thousands):


	Nine months ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	2,547	$	2,352

Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2023

Statement of Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income

Note 10: Accumulated other comprehensive income

Changes in accumulated other comprehensive income (AOCI) by component for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):


Three months ended September 30, 2023	Currency Translation Adjustments			Defined Benefit Pension Plan			Total
Balance at July 1, 2023	$	19,444		$	(1,540	)	$	17,904
Foreign currency translation loss, net of tax		(1,821	)		—			(1,821	)
Actuarial gain/(loss), net of tax		—			(48	)		(48	)

Balance as of September 30, 2023	$	17,624		$	(1,588	)	$	16,036


Three months ended September 30, 2022	Currency Translation Adjustments			Defined Benefit Pension Plan			Total
Balance at July 1, 2022	$	19,339		$	(1,565	)	$	17,774
Foreign currency translation loss, net of tax		(6,115	)		—			(6,115	)
Actuarial gain/(loss), net of tax		—			102			102

Balance as of September 30, 2022	$	13,224		$	(1,463	)	$	11,761


Nine months ended September 30, 2023	Currency Translation Adjustments			Defined Benefit Pension Plan			Total
Balance at January 1, 2023	$	20,792		$	(1,432	)	$	19,360
Foreign currency translation loss, net of tax		(3,168	)		—			(3,168	)
Actuarial gain/(loss), net of tax		—			(156	)		(156	)

Balance as of September 30, 2023	$	17,624		$	(1,588	)	$	16,036


Nine months ended September 30, 2022	Currency Translation Adjustments			Defined Benefit Pension Plan			Total
Balance at January 1, 2022	$	24,311		$	(1,278	)	$	23,033
Foreign currency translation loss, net of tax		(11,087	)		—			(11,087	)
Actuarial gain/(loss), net of tax		—			(185	)		(185	)

Balance as of September 30, 2022	$	13,224		$	(1,463	)	$	11,761

Commitments and contingencies	9 Months Ended
Commitments and contingencies	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and contingencies	Note 11: Commitments and contingencies Legal contingencies On April 12, 2018, a class-action lawsuit was filed against DDI-US demanding a return of unfair benefit under the pretext that the Company’s social casino games are not legal in the State of Washington, United States. Similar class-action lawsuits were concurrently filed with certain of our competitors, certain of which, announced settlements which the court has recently approved. On April 25, 2021, plaintiffs filed their Second Amended Complaint, changing their allegations to include an additional corporate entity of co-defendant, IGT. IGT tendered its defense of the lawsuit to DDI-US and sought indemnity for any damages from the lawsuit, based on various agreements associated with IGT’s sale of DDI-US. DDI-US had previously tendered its defense to IGT and sought indemnity from it. On August 29, 2022, DDI-US entered into an agreement in principle to settle the aforementioned Benson class action and associated proceedings, pursuant to which, among other things, IGT and DDI-US would contribute $269.75 million and $145.25 million, respectively, to the settlement fund. This agreement in principle received final court approval with the final contribution to the settlement fund made in June, 2023. The Company had an accrual of $95.25 million for the year ended December 31, 2022, which was cleared by a $95.25 million payment in the second quarter of 2023. Publishing and license agreements DoubleU Games We entered into the DoubleU Games License Agreement on March 7, 2018, and it was subsequently amended on July 1, 2019 and November 27, 2019. Pursuant to the DoubleU Games License Agreement, DoubleU Games grants us an exclusive license to develop and distribute certain DoubleU Games social casino game titles and sequels thereto in the social online game field of use. We are obligated to pay a royalty license fee to DoubleU Games in connection with these rights, with certain customary terms and conditions. The agreement remains in effect until either DUG no longer holds an interest, directly or indirectly, in DDI, or DDI no longer holds an interest, directly or indirectly, in DDI-US. In such event, the agreement provides that the parties will mutually renegotiate the terms of the agreement. As of September 30, 2023, we licensed approximately 49 game titles under the terms of this agreement. International Gaming Technologies (“IGT”) In 2017, we entered into a Game Development, Distribution, and Services agreement with IGT, and it was subsequently amended on January 1, 2019. Under the terms of the agreement, IGT will deliver game assets so that we can port (a process of converting the assets into functioning slot games by platform) the technology for inclusion in our gaming apps. The agreement includes game assets that are used to create new games. Under the agreement, we pay IGT a royalty rate of 7.5% of revenue for their proprietary assets and 15% of revenue for third-party game asset types. We also pay a monthly fee for porting. The initial term of the agreement is ten (10) years with up to two additional five-year periods. Costs incurred in connection with this agreement for the three months ended September 30, 2023 and 2022 totaled $1.5 million and $2.2 million, respectively, and are recognized as a component of cost of revenue. Costs incurred in connection with this agreement for the nine months ended September 30, 2023 and 2022 totaled $5.4 million and $7.2 million, respectively, and are recognized as a component of cost of revenue.

Related party transactions

9 Months Ended

Sep. 30, 2023

Related party transactions

Note 12: Related party transactions

The following is a summary of expenses charged by our parent, DoubleU Games (in thousands):


	Three months ended September 30,				Nine months ended September 30,				Statement of
	2023		2022		2023		2022		Income and Comprehensive Income Line Item
Royalty expense (see Note 11)	$	513	$	832	$	1,963	$	2,522	Cost of revenue
Interest expense (see Note 5)		442		431		1,323		1,356	Interest expense
Rent expense (see Note 9)		308		300		932		955	General and administrative expense
Other expense		41		59		176		173	General and administrative expense

Amounts due to our parent, DUG, are as follows (in thousands):


	At September 30,		At December 31,		Statement of Consolidated
	2023		2022		Balance Sheet Line Item
4.6% Senior Notes with related party	$	37,180	$	—	Current portion of borrowings with related party
4.6% Senior Notes with related party		—		39,454	Long-Term borrowing with related party
Royalties and other expenses		176		315	A/P and accrued expenses
Short-term lease liability		—		1,066	Short-term operating lease liabilities
Accrued interest on 4.6% Senior Notes with related party		8,679		7,852	Other non-current labilities
Long-term lease liability		—		—	Long-term lease liabilities

Defined benefit pension plan	9 Months Ended
Defined benefit pension plan	Sep. 30, 2023
Defined Benefit Pension Plan [Abstract]
Defined benefit pension plan	Note 13: Defined benefit pension plan We operate a defined benefit pension plan under employment regulations in Korea. The plan services the employees located in Seoul and is a final wage-based pension plan, which provides a specified amount of pension benefit based on length of service. The total benefit obligation of $3.6 million and $4.0 million was included in other non-current liabilities as of September 30, 2023 and December 31, 2022, respectively, and the change in actuarial gains or losses, which is not significant, was included in other comprehensive income. The plan is funded.

Subsequent Event	9 Months Ended
Subsequent Event	Sep. 30, 2023
Subsequent Events [Abstract]
Subsequent Event	Note 14: Subsequent Event On October 31, 2023, the Company closed its previously announced acquisition of iGaming operator, SuprNation AB (“SuprNation”), for a total cash consideration €34.3 million (or approximately $36.5 million based on an exchange rate of €1 = $1.064 as of October 27, 2023). The acquisition diversifies the digital games categories that the Company addresses with the addition of three real-money iGaming sites in Western Europe. Following the closing, SuprNation AB is now a direct, wholly-owned subsidiary of DDI-US. Due to the recency of the transaction, it was impracticable to reflect the acquisition of SuprNation in the Company’s third quarter financials.

Description of Business (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of preparation and consolidation

Use of estimates

Functional currency and translation of financial statements

non-monetary

items that are measured at historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

Cash and cash equivalents

Financial instruments and concentration of credit risk

Financial instruments, which potentially expose us to concentrations of credit risk, consist primarily of cash and cash equivalents, accounts receivable and short-term investments.

The following table summarizes the percentage of revenues and accounts receivable generated via our platform providers in excess of 10% of our total revenues and total accounts receivable:


	Revenue Concentration
	Three months ended September 30,						Nine months ended September 30,
	2023			2022			2023			2022
Apple		56.5	%		54.1	%		55.7	%		54.2	%
Facebook		16.2	%		24.2	%		17.2	%		24.2	%
Google		18.1	%		18.6	%		18.6	%		18.7	%


	Accounts Receivable Concentration
	As of September 30,			As of December 31,
	2023			2022
Apple		62.5	%		55.8	%
Facebook		9.4	%		20.4	%
Google		10.5	%		17.7	%

Description of Business (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Summary of percentage of revenues

The following table summarizes the percentage of revenues and accounts receivable generated via our platform providers in excess of 10% of our total revenues and total accounts receivable:


	Revenue Concentration
	Three months ended September 30,						Nine months ended September 30,
	2023			2022			2023			2022
Apple		56.5	%		54.1	%		55.7	%		54.2	%
Facebook		16.2	%		24.2	%		17.2	%		24.2	%
Google		18.1	%		18.6	%		18.6	%		18.7	%


	Accounts Receivable Concentration
	As of September 30,			As of December 31,
	2023			2022
Apple		62.5	%		55.8	%
Facebook		9.4	%		20.4	%
Google		10.5	%		17.7	%

Revenue from Contracts with Customers (Tables)

9 Months Ended

Sep. 30, 2023

Disaggregation of Revenue [Abstract]

Summary of disaggregation of revenue

The following table represents our disaggregation of revenue between mobile and web platforms (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Mobile	$	61,130	$	59,150	$	186,928	$	184,033
Web		11,853		19,651		38,838		60,824

Total	$	72,983	$	78,801	$	225,766	$	244,857

The following table presents our revenue disaggregated based on the geographical location of our players (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
U.S. (1)	$	63,719	$	70,044	$	197,551	$	214,394
International		9,264		8,757		28,215		30,463

Total	$	72,983	$	78,801	$	225,766	$	244,857

(1)	Geographic location is presented as being derived from the U.S. when data is not available.

Summary of contract assets and contract liabilities

The following table summarized our opening and closing balances in contract assets and contract liabilities (in thousands):


	As of September 30,		As of December 31,
	2023		2022
Contract assets (1)	$	613	$	728
Contract liabilities		2,044		2,426

(1)	Contract assets are included within prepaid expenses and other assets in our consolidated balance sheet.

Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of intangible assets


			September 30, 2023										December 31, 2022
	Useful life		Gross amount		Accumulated amortization			Impairment			Net amount		Gross amount		Accumulated amortization			Impairment			Net amount
Goodwill		indefinite	$	633,965	$	—		$	(254,893	)	$	379,072	$	633,965	$	—		$	(254,893	)	$	379,072
Trademarks		indefinite		50,000		—			(15,000	)		35,000		50,000		—			(15,000	)		35,000
Customer relationships		4 years		75,000		(75,000	)		—			—		75,000		(75,000	)		—			—
Purchased technology		5 years		45,423		(45,423	)		—			—		45,423		(45,423	)		—			—
Development costs		3 years		9,486		(9,486	)		—			—		9,486		(9,486	)		—			—
Software		4 years		2,467		(2,421	)		—			46		2,462		(2,411	)		—			51

Total			$	816,341	$	(132,330	)	$	(269,893	)	$	414,118	$	816,336	$	(132,320	)	$	(269,893	)	$	414,123

Summary of reflects amortization expenses

The following reflects amortization expense related to intangible assets included with depreciation and amortization (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Amortization Expense	$	4.2	$	3.7	$	12.5	$	3,624

Debt (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Summary of long-term debt instruments

The components of debt at September 30, 2023 and December 31, 2022 are as follows (in thousands):


	As of September 30,		As of December 31,
	2023		2022
4.60% Senior Notes due to related party due 2024	$	37,180	$	39,454

Total debt		37,180		39,454
Less: Short-term debt		37,180		—

Total Long-term debt	$	—	$	39,454

Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Summary of Cash Flow Information Related to Operating Leases

Supplemental balance sheet and cash flow information related to operating leases is as follows (in thousands):


	As of September 30, 2023		As of December 31, 2022
Operating lease right-of-use asset	$	2,196	$	4,675
Accrued rent		470		817

Total operating lease right-of-use asset, net	$	1,726	$	3,858

Short-term operating lease liabilities		2,020		3,050
Long-term operating lease liabilities		176		1,625

Total operating lease liabilities	$	2,196	$	4,675

Supplemental cash flow information related to leases was as follows (in thousands):


	Nine months ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	2,547	$	2,352

Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2023

Statement of Other Comprehensive Income [Abstract]

Summary of Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (AOCI) by component for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):


Three months ended September 30, 2023	Currency Translation Adjustments			Defined Benefit Pension Plan			Total
Balance at July 1, 2023	$	19,444		$	(1,540	)	$	17,904
Foreign currency translation loss, net of tax		(1,821	)		—			(1,821	)
Actuarial gain/(loss), net of tax		—			(48	)		(48	)

Balance as of September 30, 2023	$	17,624		$	(1,588	)	$	16,036


Three months ended September 30, 2022	Currency Translation Adjustments			Defined Benefit Pension Plan			Total
Balance at July 1, 2022	$	19,339		$	(1,565	)	$	17,774
Foreign currency translation loss, net of tax		(6,115	)		—			(6,115	)
Actuarial gain/(loss), net of tax		—			102			102

Balance as of September 30, 2022	$	13,224		$	(1,463	)	$	11,761


Nine months ended September 30, 2023	Currency Translation Adjustments			Defined Benefit Pension Plan			Total
Balance at January 1, 2023	$	20,792		$	(1,432	)	$	19,360
Foreign currency translation loss, net of tax		(3,168	)		—			(3,168	)
Actuarial gain/(loss), net of tax		—			(156	)		(156	)

Balance as of September 30, 2023	$	17,624		$	(1,588	)	$	16,036


Nine months ended September 30, 2022	Currency Translation Adjustments			Defined Benefit Pension Plan			Total
Balance at January 1, 2022	$	24,311		$	(1,278	)	$	23,033
Foreign currency translation loss, net of tax		(11,087	)		—			(11,087	)
Actuarial gain/(loss), net of tax		—			(185	)		(185	)

Balance as of September 30, 2022	$	13,224		$	(1,463	)	$	11,761

Related party transactions (Tables)

9 Months Ended

Sep. 30, 2023

Summary of Expenses Charged by Our Parent

The following is a summary of expenses charged by our parent, DoubleU Games (in thousands):


	Three months ended September 30,				Nine months ended September 30,				Statement of
	2023		2022		2023		2022		Income and Comprehensive Income Line Item
Royalty expense (see Note 11)	$	513	$	832	$	1,963	$	2,522	Cost of revenue
Interest expense (see Note 5)		442		431		1,323		1,356	Interest expense
Rent expense (see Note 9)		308		300		932		955	General and administrative expense
Other expense		41		59		176		173	General and administrative expense

Summary of Amounts Due to our Parent

Amounts due to our parent, DUG, are as follows (in thousands):


	At September 30,		At December 31,		Statement of Consolidated
	2023		2022		Balance Sheet Line Item
4.6% Senior Notes with related party	$	37,180	$	—	Current portion of borrowings with related party
4.6% Senior Notes with related party		—		39,454	Long-Term borrowing with related party
Royalties and other expenses		176		315	A/P and accrued expenses
Short-term lease liability		—		1,066	Short-term operating lease liabilities
Accrued interest on 4.6% Senior Notes with related party		8,679		7,852	Other non-current labilities
Long-term lease liability		—		—	Long-term lease liabilities

Description of Business - Additional Information (Details) ₩ in Thousands, $ in Millions			12 Months Ended
	Dec. 28, 2022 KRW (₩)	Aug. 26, 2022 KRW (₩)	Dec. 31, 2017 USD ($)	Sep. 30, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Business combination consideration transferred \| $			$ 825
Reduction of capital reserve \| ₩	₩ 330,000,000,000	₩ 70,000,000,000
American Depositary Shares [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Entity listing depository receipt ratio				0.05
DoubleU Games Co., Ltd.[Member] \| Equity Investee [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Equity interest percentage				67.10%
STIC Special Situation Private Equity Fund [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Minority interest ownership percentage				32.90%
International Gaming Technologies [Member] \| IPO [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Minority interest ownership percentage				12.70%
Stic [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Minority interest ownership percentage				20.20%

Description of business - Summary of Percentage of Revenues (Details) - Customer Concentration Risk [Member]	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Revenue Concentration \| Apple
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage	56.50%	54.10%	55.70%	54.20%
Revenue Concentration \| Facebook
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage	16.20%	24.20%	17.20%	24.20%
Revenue Concentration \| Google
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage	18.10%	18.60%	18.60%	18.70%
Account Receivable Concentration \| Apple
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage			62.50%		55.80%
Account Receivable Concentration \| Facebook
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage			9.40%		20.40%
Account Receivable Concentration \| Google
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage			10.50%		17.70%

Revenue from Contracts with Customers - Summary of Disaggregation of Revenue (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

$ 72,983

$ 78,801

$ 225,766

$ 244,857

^[1]

63,719

70,044

197,551

214,394

International

9,264

8,757

28,215

30,463

Mobile

61,130

59,150

186,928

184,033

Web