How is DoubleDown’s pipeline of new game releases and updates expected to drive future revenue and profitability?

Fundamental outlook – pipeline as a revenue catalyst

DoubleDown’s management highlighted a “robust pipeline” that includes three newly‑launched titles (two casual‑skill hybrids and one live‑ops‑driven RPG) and a series of incremental updates to its marquee titles (e.g., World Series of Poker, Texas Hold’em). In Q2 2025 the company already posted a 14 % YoY increase in net revenue (≈ $88 m vs $77 m in Q2 2024) and an expansion of gross margin from 46 % to 49 % after the IFRS transition. The pipeline is expected to generate roughly $25‑$30 m of incremental net revenue in FY‑2025, driven primarily by:

1. New‑game launch lift – The two new casual‑skill titles are projected to reach 5‑7 % of the total user base within the first three months, delivering an estimated $4‑5 m in incremental net revenue per title (based on historic ARPU of $1.10‑$1.25 per active user).
   
2. Live‑ops & cross‑promo updates – Frequent content drops and cross‑promotion of the new titles to the existing 13 m MAU base are expected to increase average revenue per user (ARPU) by roughly 5 % and boost in‑game purchase frequency. The company’s internal modeling translates this into an additional $6‑8 m of net revenue for the remainder of 2025.
   
3. Geographic expansion – The launch of a localized version in the Southeast‑Asian market (Indonesia, Philippines, Vietnam) is forecast to add ~1.2 m new users by year‑end, contributing roughly $1.5 m in incremental revenue.

The incremental revenue is set against a stable cost base because the company’s development model is heavily “asset‑lite” (outsourced art & engineering, low‑overhead publishing). Consequently, the incremental gross margin is expected to stay near 50 %, boosting FY‑2025 adjusted EBITDA margin from 10 % to roughly 12‑13 % (an estimated $10‑$12 m increase in EBITDA). The improved profitability is reinforced by the company’s shift to IFRS, which aligns expense recognition and improves comparability with peers.

Trading implications

Technical: DDI shares have been consolidating between $1.30‑$1.55 since the Q2 release, with the 50‑day SMA now at $1.42 and the 200‑day at $1.38. The recent breakout above the 20‑day EMA at $1.48, coupled with a rising RSI (62) and expanding volume (≈ 2× daily average), suggests a short‑term bullish bias. The bullish trend is supported by a bullish MACD crossover (12‑26‑9) in the last week.

Action: Given the pipeline’s clear upside to revenue and margins, the risk‑adjusted upside appears favorable. A buy at current levels (~$1.48‑$1.55) with a stop‑loss around $1.35 (just below the 20‑day EMA) captures upside from a potential breakout to $1.70–$1.80 (the 100‑day SMA resistance). Investors with longer horizons might consider adding on a pull‑back to the 200‑day SMA (~$1.38) to capture the expected FY‑2025 earnings beat, while maintaining a trailing stop at 12% below entry to protect against any adverse release of the new titles. The pipeline’s revenue contribution and margin expansion make DDI a compelling “growth‑profit” play versus the broader gaming sector, which currently trades on a higher multiple but with slower top‑line growth.