Evoke reports YoY revenue growth for the first time since Q1 2022

Evoke has posted a 3% year-on-year (YoY) increase in revenue for the third quarter, with the operator noting it was the first quarter of YoY growth since Q1 2022 due to market share gains in key international markets.

Revenue stood at £417m for the three months ending 30 September, fuelled by 10% growth in gaming, which offset “customer-friendly sports results” in September – impacting group revenue by approximately £17m.

Online revenue was up 8% YoY, as core markets – classed as the UK, Italy, Spain, Denmark and Romania – achieved an increase of 11% YoY.

The company pointed out that these markets now represent nearly 85% of the group’s online revenue when including Romania.

In the UK and Ireland Online, evoke reported 3% YoY growth in revenue, with 12% YoY “accelerated trends in gaming”.

However, this was also offset by weaker trends in betting due to customer-friendly sporting results last month, including poor results at the start of the Premier League season, which impacted revenue by approximately £10m.

There was 14% YoY growth – or 17% in constant currency (cc) – in the International arm’s revenue, primarily driven by a 26% YoY (29% in cc) rise in core international markets including Italy, Spain, Denmark and the aforementioned Romania.

These markets now make up two thirds of evoke’s international revenue, with the firm now counting Romania as a core market, following the majority stake taken in local operator Winner.ro in August. A dual-brand strategy operates in the country with winner.ro and the existing 888 operation.

Average monthly actives across the group remained flat at 1.65 million, while sportsbook stakes fell 7% to £1.12bn, the firm revealed.

Sportsbook net revenue margin came in at 11%, although this percentage was inflated by retail (16.8%); UK&I online net revenue margin was 8.6% – down from 9% in Q3 2023 – and International net revenue margin landed at 7.5%, slightly up from 7.2% the prior year.

Revenue for the first nine months of the year was £1.23bn, a slight fall of 1% YoY.

Focusing on strategic highlights in the quarter, evoke said it had made important progress with its turnaround plans.

These included delivering strong results in core markets, inclusive of Italy where revenue growth was 31% cc. 888casino is the “clear market-leader in the casino-first segment” in the European country, management said.

Evoke also pointed to positive customer reaction surrounding new product launches in Q3 including its new bet builder and Impact Sub concession, as well as the revamped William Hill app.

The operator also pointed to £23m in cost savings through a “highly effective new operating model”, reducing the layers in the business from 10 to six and streamlining its office footprint in Manila, which has enabled better outsourcing and automation.

Further Q3 highlights include the acquisition of Winner.ro in August, creating evoke’s fifth core market. Evoke is now targeting a podium position in the market through both its 888 and Winner brands.

The closure of its New Jersey and Virginia businesses is now expected in Q1 2025, leading to a full exit from US B2C.

Evoke issued no change to its previously issued H2 2024 outlook. Revenue growth is expected to be 5% to 9%, with an adjusted EBITDA margin of approximately 21%.

As for FY2025 expectations, evoke added there is also no change with adjusted EBITDA margin expected to be at least 20% “with unchanged medium-term targets of 5-9% revenue growth per year, c.100 basis points of adjusted EBITDA margin expansion per year and leverage of below 3.5x by the end of 2026”.

Commenting on the company’s performance after 12 months in charge as CEO, Per Widerström said: “I have now been in position for a year, and I am pleased that the turnaround of the business is working, with the first quarter of revenue growth since Q1 2022 and positive underlying trends.

“We are achieving our plans to improve trading in the short-term, while simultaneously radically transforming the group’s capabilities for the long term.

“Our online business is a clear growth engine for the group and we saw a return to double-digit online revenue growth in our core markets in Q3 2024 underpinned by our focused market strategy and supported by important product investments and the results of our clearer customer value proposition and segmentation.

“I am pleased to report a strong quarter of progress as we continue to implement our strategy for success and deliver our value creation plan. 

“We are moving decisively and at pace to position evoke for long-term growth, and I look forward to providing further updates about our progress in the coming months.”

Evoke’s share price was up 3.8% to 59p, at the time of writing.