1. What Happened? Q2 Earnings Analysis

DoubleU Games announced its Q2 2025 preliminary earnings on August 13th. While revenue reached ₩171.9 billion, slightly below the expected ₩175.3 billion, operating profit (₩54.3 billion) and net profit (₩22.7 billion) plummeted by 7.8% and a staggering 56.4%, respectively, compared to projections. The sharp decline in net profit, in particular, shocked the market.

2. Why These Results? Analyzing the Underperformance

This earnings shock can be attributed to a combination of factors: slowing growth in the traditional social casino business, increased expenses related to new business investments and M&A activities, and foreign exchange fluctuations. The sharp drop in web revenue and the slowdown in mobile growth signal weakening competitiveness in the existing business.

3. What’s Next? Future Outlook and Investment Strategies

Short-term downward pressure on the stock price and dampened investor sentiment seem inevitable. However, the mid-to-long-term growth potential of the iGaming and casual gaming segments should be considered. A successful business portfolio transition and improved cost efficiency could pave the way for a rebound.

4. What Should Investors Do? Action Plan

  • The Q3 earnings announcement should be closely monitored to determine whether the decline in net profit is a one-off event or a structural issue.
  • The actual revenue contribution of the iGaming and casual gaming segments needs continuous evaluation.
  • Investors should prepare for exchange rate volatility and closely monitor the performance of new M&A activities and business investments.