Good morning. We'd like to thank the analysts and domestic and foreign investors who are attending the 2024 Q3 earnings presentation conference call of DoubleU Games today. Prior to the presentation, I'd like to pass along a few requests. The performance data is prepared for the convenience of investors based on the provisional financial statements for the Q3 2024. This data was written with reference to objective standards. However, please note that some predictions, forecasts, or expressions based on subjective judgment may be included, and numbers and interpretations that do not match this data may be derived due to changes in the future environment, different data aggregation standards, and etcetera. Today's earnings presentation will be conducted by our new Head of IR division, Mr. Shin Young-Joo, and the Q&A session by our CFO, Mr. Choi Jaeyoung.
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Good morning. My name is Shin Young-Joo, and I'm the new Head of IR division at DoubleU Games. It is a great pleasure to introduce myself for the first time through this earnings call. I will continue to do our best, and my best to strengthen communication with shareholders and investors and communicate our company's content and strategies more effectively. Today's presentation is organized as you can see on page three, which include 2024 Q3 highlights, earnings summary, revenue analysis, cost analysis, and business updates. We will have a Q&A session after all presentations.
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I will first discuss our Q3 highlights as shown on page four. The highlights of Q3 are expanding shareholder returns and enhancing shareholder value based on stable profitability. First, shareholder return. We have refined the timing of the implementation of our shareholder return policies, which are in line with the mid to long-term roadmap that we announced in April this year. We plan to implement a special disposal of treasury shares, a cash dividend resolution, and the purchase and cancellation of treasury shares on a quarterly basis throughout 2025. Second, growth. Q3 operating revenue increased by 10.4% YOY, and we have prepared each in-game event for the U.S. holidays, which are concentrated in Q4, and expectation for Q4 revenue growth remain valid. We aim to increase user metrics by releasing seasonal content for each holiday in a timely manner.
Finally, profitability. As in the previous quarter, we continue to streamline marketing and sales expenses, resulting in stable operating profit and EBITDA margins. Operating income for the quarter was KRW 59.5 billion, up 10% YOY, and EBITDA was KRW 62.5 billion, up 11.6% YOY, indicating continued stable profitability.
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Now let us turn to page five, and I will explain the summary of consolidating results for the third quarter. Operating revenue on a consolidated basis for 2024 Q3 was KRW 154.1 billion, up 10.4% YOY. Social casino and iGaming businesses continue to generate stable revenue. Operating income was KRW 59.5 billion with a margin of 38.6%, up 10.0% YOY. EBITDA was KRW 62.5 billion with a margin of 40.6%, up 11.6% YOY. Notably, EBITDA exceeded KRW 60 billion for the fourth consecutive quarter, demonstrating continued profitability. Net income was KRW 40.9 billion with a 26.5% margin, down 20.3% YOY. The main reason for the decline in net income was the impact of foreign exchange translation losses due to a 5% decline in the exchange rate at the end of the quarter, which is expected to recover in Q4 due to the recent strengthening of the dollar.
The company continues to record stable performance after achieving the highest revenue performance in 13 quarters due to the growth of social casino revenue and the inclusion of iGaming revenue in the last two quarters. In addition, profitability was maintained due to efficient marketing and predictable cost management.
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Now I'd like to turn to page six, operating revenue analysis. Consolidated operating revenue for 2024 Q3 was KRW 154.1 billion. By business division, social casino and casual games recorded KRW 143.5 billion with mobile sales accounting for 85.0%. iGaming revenue was KRW 10.6 billion, down slightly QoQ. This is due to the seasonality of Q3 and A/B testing to improve marketing efficiency. Franchise games DoubleDown Casino and DoubleU Casino accounted for 90% of total revenue, and SuprNation's iGaming revenue accounted for 7% of total revenue, and revenue diversification is underway. Revenue by game was KRW 100.3 billion for DoubleDown Casino, up 6.9% YOY, and KRW 38.3 billion for DoubleU Casino, down 8.4% YOY. Total revenue was KRW 154.1 billion, which was down 5.5% QoQ, but up 10.4% YOY.
With the overall market growth rate for social casino was -1.8% YOY, our social casino business outperformed with a 2.8% YOY growth. The oligopoly position of the market is strengthening with the top players. In the iGaming segment, we have been ramping up marketing investment since November. Up to October, we have been strategically managing marketing expenses while working on elaborating marketing data. Since November, we have been increasing marketing in earnest, which is expected to increase sales. In particular, unlike general mobile games, iGaming is expected to have a faster recovery period of about one to two months for marketing expenses based on the gross sales, resulting in a more efficient conversion of marketing investment to sales.
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On page seven, I will explain the operating cost analysis on a consolidated basis for 2024 Q3. Platform costs amounted to KRW 40.8 billion, which is a variable cost that pays 30% of sales to platform companies such as Google and Apple. Recently, global platforms have been gradually reducing their in-app payment fee rates, and we expect to benefit from this trend in the future. Marketing expenses were KRW 14 billion, down 11.9% QoQ and 23.9% YOY, and this is 9.1% out of revenue. The decrease in marketing expenses in the third quarter was driven by social casino, new games, and iGaming. By genre, 80% of total marketing expenses were invested in social casino, 16% in iGaming, and 4% in other games. Personnel expenses were KRW 22.5 billion, up 3.2% QoQ.
The total number of employees at the end of the third quarter was approximately 600, comprised of 400 at DoubleU Games, 130 at DoubleDown Interactive, and 60 at SuprNation. Royalties amounted to KRW 2.7 billion, and this includes royalties from IGT and fees for the use of iGaming's external Slot IPs. Intangible amortization expense was KRW 3 billion, similar to the previous quarter. Approximately KRW 2 billion was due to amortization of office rent under lease accounting, and PPA accounting expenses of approximately KRW 1 billion were also reflected due to the acquisition of SuprNation.
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Now on page eight on operation costs. Our operating costs have remained stable as they are controlled very efficiently. We will maintain fixed costs such as labor and operating expenses at the current level while continuing our operating strategies of driving sales growth through marketing investments that meet ROI. In particular, we plan to minimize impact on operating income by making marketing investments that meet ROI even when launching new games.
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Now, I would like to explain about our 2025 shareholder return plans on page nine. In April this year, we set a roadmap for returning to shareholders, and we have further refined the parts I mentioned by the time. First, let me talk about the special disposal of treasury stock. Currently, we hold approximately 7.8% of our outstanding shares in treasury stock, and we plan to dispose or retire 50% of our treasury stock in 2025 Q1 if we do not disclose any M&A or investment utilizing treasury stock by the end of 2024. For cash dividends, we plan to declare a cash dividend in the first quarter of 2025 based on the consolidated EBITDA in 2024, in line with the long-term dividend policy we announced this year.
In 2024, cash dividends totaling KRW 16.5 billion were paid out, and with a 26% increase in cumulative EBITDA in the third quarter, we expect it to be able to significantly increase dividends year- over- year. For treasury stock repurchases, we plan to set a minimum of one time and a maximum of three times total cash dividends for 2024, and we expect to implement this in 2025 Q2- Q3. In addition, for treasury stock repurchases, we plan to repurchase a minimum of 1% and a maximum of 2% of the total shares outstanding by the end of 2024, with implementation planned for the fourth quarter of 2025.
We will announce the detailed implementation of our shareholder return policies through relevant disclosures at the appropriate time, and we will continue to demonstrate our commitment to shareholder value enhancement through our shareholder-friendly treasury stock policies and cash dividends for another year.
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Now about Q4 seasonality on page 10. As mentioned earlier, there are various holidays coming soon in Q4 that are favorable for social casinos as well as iGaming. In October, we have Halloween and Columbus Day, and in November, Thanksgiving and Veterans Day, and in December, Christmas and New Year's Eve. For social casino in particular, we have a history of seeing payments on the day of these holidays in 2023 increased by more than 10% compared to the quarterly average daily payment.
We are targeting strong year-over-year revenue growth in social casino by capitalizing on the seasonal nature of the fourth quarter. In the iGaming segment, as I mentioned earlier as well, we are expecting revenue growth as we have been expanding our marketing investments since November. In particular, the iGaming business plans to take full advantage of the high revenue conversion rate and short payback period for marketing investments.
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Now let us turn to page 11, which talks about enabling social casino DTC platforms. Recently, various social casino companies, including the number one player Playtika, have been working to increase the proportion of payments made through their own platforms, and this is known as direct-to-consumer or DTC. We are also making multiple efforts to reduce our platform fees. We are activating DTC payments by operating the self-developed websites of DoubleU Casino and DoubleDown Casino.
As the proportion of payments through DTC platforms increase, it is expected to contribute to improving our profitability by reducing Google and Apple platform fees, which amount to about 30% of payments, and we will be able to pay only PG fees. For reference, as of the end of Q3 2024, DTC revenue accounted for approximately 8% of total revenue. In the future, we plan to further improve profitability by increasing the proportion of DTC sales centered on loyal customers of DoubleDown Casino and DoubleU Casino.
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On page 12, I will update you on our casual game development. I will talk about Divine Match3, which is currently seeing meaningful results. Divine Match3, our match-3 puzzle game, is currently in soft- launching phase, and we are working to improve key metrics, including retention. It recently reached 45.4% D1 retention, which is the highest D1 retention of any of our recently launched games. This is a significant improvement from the initial result, and we have improved D3 and D7 retention through various events, such as the introduction of a ranking system and attendance rewards. We are also continuing to make improvements across the game, including UI, UX improvements, optimizing the app market, and introducing various monetization BM models in order to prepare for the global launch. We will share information related to the global launch with investors through press releases at the appropriate time.
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This concludes our earnings presentation on 2024 Q3, which were explained up to page 12. Now our CFO, Mr. Choi Jaeyoung, will proceed with the Q&A session.
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Thank you for this opportunity to ask a question. I have two questions. First, about the financial expenses. It seems like the financial costs have increased. When we received the analysis on the previous quarter, I think I remember that you have separated the foreign exchange-related expenses. How about this quarter? That's my first question. My second question is about the upcoming Trump administration. I remember that under the previous Trump administration, we witnessed the strengthening of the dollar at the beginning, but it turned to weakening of the dollar later on. If this happens again, per KRW 100 gap when it comes to foreign exchange, how much impact do you think will be given to our company?
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Thank you very much. I am Choi Jaeyoung, CFO of DoubleU Games. I will give my first answer to your first question. The most of the financial related expenses were related to the foreign exchange. Because by the end of each quarter, we get evaluation based on our foreign exchange, foreign currency based assets. And then we saw the 5% loss by the end of the last quarter. And because the evaluation of the value of our foreign currency-based assets were a little bit decreased.
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Regarding your second question, if we assess the impact that is given by the changes in the foreign currency per KRW 100 , our operating revenue might be impacted by 5%. However, it's not easy to accurately predict the flow of the dollars and foreign exchange trends. We will try hard to flexibly respond to the changes in the market.
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The next question will be presented by Dan Kim from Morgan Stanley.
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Thank you for this opportunity. I might have lost the first part of your earnings presentation, but what's the reason behind the decrease in the revenue in social casino? Secondly, you stated that your company will expand the marketing expenses, so is it going to be subject to iGaming only? Or will social casino be impacted by this as well? I believe that you have expected somewhat meaningful results from the U.K. market when it comes to iGaming, but by expanding your marketing expenses, how much impact do you think will come up from the U.K. market?
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Thank you for your questions. Let me first answer your first question. The reason behind the slight decrease in the revenue of the social casino is that there was a somewhat slight decrease which used to be outperformed in the market. When we compare to the U.S. presidential election period four years ago, we were impacted by the seasonality because most of our users are the Americans who are in their 40s or 50s, who are very interested and who are very engaged in politics-related activities in the U.S. That's why we saw a slight decrease in the play time.
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Regarding your second question, we are expanding our marketing expenses on iGaming from November because unlike the mobile games or social casino games, the recovery period of ROI for these kind of games is only one to two months, which is relatively shorter. That's why we want to focus on this part first to increase our short-term revenue. When it comes to social casino, if the ROI goals are achieved, then we will also consider expanding our marketing expenses for this one as well. Currently, we are investing in marketing within the scope that will not damage our profitability. Regarding the market share in the U.K., we are under 1% as of now, so we are relatively a small company in the U.K. market as of now. However, our goal is to increase revenue by at least 2x in the near future.
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While waiting for additional questions, let me explain about our M&A related plans. As you may well know, we have reviewed many different potential non-game M&A opportunities, but we are currently more focused on game areas. Especially, we are targeting the North America market, and we are reviewing puzzle games, which have wider players compared to the social casino. Because we can acquire users with lower CPI compared to social casinos. So that's why we believe that there are more potentials in these by investing in the marketing through scale-up , and that we can expect more efficient expansion in this area.
In addition, we believe that this will be an important opportunity to strengthen our global competitiveness in our new games. Currently, we are having very in-depth discussions with a Europe-based casual game company, and at earliest, we will be able to share the progress with the shareholders within this year.
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If there are no more questions, we will close the Q&A session here. Before completing our earnings call, I'd like to add one more comment about what was highlighted during our earnings presentation, which is the DTC platform. We emphasize the importance of DTC as well as our progress on this, because currently, not only in social casino, but also in the mobile game market, we see that many companies are making efforts to improve their profitability by building their own platform, just like we are doing right now.
If we can save up the cost that was paid to the platform companies before, we will use these as important resources for the marketing to acquire more users and grow our revenues. When we have more updates, we will be able to share with you. We are very committed to improving our profitability and overall our earnings so that we can bring you a better result for all of our shareholders.
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Thank you once again for your participation despite your busy schedule. With the new Head of our IR division and all of the employees at our company, we'll strengthen communication with you. If you have any questions, please feel free to contact us anytime. Thank you very much.