Evolution Q3 revenue rises 19% despite studio project delays

Evolution has posted a 19.6% year-on-year (YoY) increase in revenue for Q3 2023, with Europe at the top of the pile for the supplier’s geographical revenue mix. 

The live casino juggernaut recorded €452.6m (£394.9m) in worldwide revenue for the three months between July and September, up from €378.5m in the same period in 2022.

The supplier also noted a 22.1% YoY increase in EBITDA to €318.6m, with a corresponding to an EBITDA margin of 70.4%. 

Operating profit rose by 21.5% YoY from €261m to €287.1m, while total profit grew by 23.27% to €272.8m.

Looking at group revenue by vertical, live casino accounted for the majority share of the firm’s revenue, bringing in €385.8m, up 24.3% from €310.4m in Q2 2022.

The rise comes despite CEO Martin Carlesund saying the division did not deliver in the way the firm wanted it to in Q3.

He explained: “We have faced delays, and in some cases not executed fully, in several of our planned studio projects for this year, but even more importantly, we need to increase the pace of recruitment both in existing studios as well as to support new studios. 

“We are working hard to get back on track in our existing locations and we will continue to invest in our network of studios and add new locations.”

The RNG section saw a slight decline in revenue YoY, from €68.1m to €66.8m, which is an even further drop on the €69.3m recorded in Q2 2023.

Carlesund said that despite this small decline, the RNG side of the business had made progress in the quarter. 

He said: “Our release pace is now where we want it to be and all new games are from the third quarter on OSS (One Stop Shop). We are methodically and systematically moving our RNG business forward. Our earlier communicated goal for RNG growth remains, but at the moment, we focus on showing step-by-step improvements.”

When breaking revenue down by region, Europe took the lion’s share of the total with €175.1m, up 10% YoY, while the Asian division was not far behind with revenue of €172.1m, up 34.7% YoY.

The North American segment reported revenue of €54.7m, which is up on the €50.2m posted in Q3 2022 but a slight drop on the €55.5m recorded in Q2 2023. Lastly, Latam revenue jumped by 38.7% to €34.4m.

Speaking on the results, Carlesund commented: “This is a good financial performance, and the underlying growth drivers for the business remains solid. During the third quarter, we released more games than during any earlier quarter. 

“A strong development that I am pleased with as entertaining games and a flawless player experience are the absolute most important factors for our long-term success.”

Carlesund also spoke of some of the challenges the firm faced this quarter. He added: “We are focused on factors that are within our control when explaining our financial result.

“However, this quarter, the impact of external factors, such as currency effects, are more significant than ever. The strengthening of the Euro against most currencies has affected our top-line growth negatively during this year.”

Carlesund ended by giving an update on the supplier’s ambitions going forward. He concluded: “We face a tougher macro climate today than one year ago, and we are underserving the market at the moment, but we will continue to invest, optimise recruitment and, as always, push for growth through a focus on product innovation. 

“Our financial strength will continue to serve us well as we can continue to invest without interruption and grow. We remain committed to delivering new, thrilling experiences to new and existing players and continue to strive to be just a little better every day. I look forward to the final months of the year and onwards into 2024.”