On August 11, DoubleDown Interactive (NASDAQ:DDI) reported second-quarter results that make the stock look almost too cheap to be true. Profit for the period jumped 50.5% to $32.9 million, translating into earnings per fully diluted share of $13.27, up from $8.82 a year earlier. Revenue for the quarter ended June 30 climbed 11.2% to $94.3 million. Yet the company’s future ownership is still an open question, one that has nothing to do with any of these numbers.
Consumer Channel Shift Pays Off
The clearest driver of that profit jump is where DoubleDown’s social casino revenue is coming from. Direct-to-consumer sales, the transactions that flow straight through the company’s own web storefronts rather than through app store cuts, nearly quadrupled to $40.5 million in the quarter from $10.7 million a year earlier. That channel now makes up 52.4% of social casino revenue, versus just 15.4% in the second quarter of 2025. Skipping the platform toll on more than half of that business is a structural reason costs came down, and profit outran revenue growth.
SuprNation, the company’s European iGaming arm, added another leg to the story. Its revenue rose 9.8% year over year to $17 million, powered by the newer Los Vegas brand rather than the older parts of the portfolio. Adjusted EBITDA across the whole company rose 17.2% to $39.3 million, with margin expanding to 41.6% from 39.5%. And none of it is on paper only. Operating cash flow reached $24.6 million in the quarter and $71 million for the first half of 2026, leaving DoubleDown sitting on a net cash position of $521 million.
The audience behind these numbers also got bigger and more willing to pay. Average monthly active users rose to 1.252 million from 1.163 million, and the share of players converting into paying customers climbed to 9.4% from 7.0%. Average revenue per daily active user rose to $1.42 from $1.33. Much of that lift traces back to WHOW Games, the German developer DoubleDown acquired on July 14, 2025, whose player base converts at a higher rate than DoubleDown’s legacy titles.
The Buyout Question Still Lingers
Growth came with a bigger expense base attached. Total operating expenses rose to $57.8 million from $52.4 million, largely because WHOW Games’ own cost structure is now consolidated into the results, with additional spending going toward supporting SuprNation’s expansion. And not every metric tied to WHOW moved in DoubleDown’s favor. Average monthly revenue per payer fell to $218 from $286, since WHOW’s players simply spend less individually than DoubleDown’s existing base, even though more of them are converting.
Part of the earnings jump also came from outside the core business. The company attributed some of the profit increase to a higher unrealized gain on foreign currency, a line item that swings with exchange rates rather than with how many people are playing DoubleDown’s games. That makes the 50.5% profit growth figure somewhat less repeatable than it looks at first glance.
Then there is the unresolved question hanging over the stock since April 29, when DoubleU Games, DoubleDown’s controlling shareholder, made a non-binding offer to buy out the remaining shares it does not already own for $11.25 per ADS in cash. A special committee is still reviewing that proposal, and DoubleDown says it has nothing further to announce until the committee decides otherwise. Until it does, per-share results like this quarter’s $13.27 in fully diluted earnings sit somewhat disconnected from a stock price shaped more by deal speculation than by fundamentals.
What Wall Street Sees Now
11 hedge funds held DoubleDown Interactive heading into the most recent quarter, up from 9 funds the quarter before, a modest but real sign of accumulating institutional conviction. Short interest sits at just 0.13% of the float, about as close to zero organized skepticism as a stock can get. The forward price-to-earnings ratio is 4.89, as of September 8, a multiple more often seen in companies expected to shrink than ones that just grew profit by half. That gap between a rock-bottom multiple and rising hedge fund interest suggests investors are still pricing in the buyout uncertainty more than the earnings.
Where This Leaves Investors
DoubleDown delivered a quarter where nearly every operating measure, from adjusted EBITDA to payer conversion to cash on hand, moved in the right direction. Yet the stock’s rock-bottom forward earnings multiple reflects a company whose ownership is still unsettled, not one the market has overlooked. The DTC shift and SuprNation’s growth will need to keep compounding once WHOW Games stops accounting for most of the improvement in the numbers.
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