Evolution Q4 revenue increases 16% as CEO fires warning shot to competitors

Evolution has reported a 16.6% year-on-year (YoY) jump in revenue for Q4 2022 as the supplier saw the figure increase from €407.5m to €475.3m.

The firm championed its ongoing success in the live casino vertical as a core reason for the revenue jump, while also citing increased commission income from new and existing customers.

EBITDA increased 20.5% YoY, from €279.5m to €337m, while operating profit for the quarter stood at €302.6m, an increase of 21% YoY from €250m.

EBITDA margin was 70.9%, up from 68.6% for the same period last year, and operating margin was 63.7%, an increase from 61.4%.

Looking at revenue by vertical, live casino leapt from €335m the year prior to €405.6m as management praised a “better balance” between supply and demand and the opening of a new studio in Bulgaria.

RNG revenue fell from €72.5m to €69.8m but there was quarter-on-quarter growth from €66.8m as the division continues to lag behind live casino.

Additionally, Evolution’s top partner accounted for 13% of total revenue, while the top five represented 41% in total.

Geographically, Europe took the lion’s share of revenue with €185.8m, up from €170m in Q4 2022, with Asia close behind reporting revenue of €181.7m.

Growth in the US has continued to remain flat among the lack of states giving the green light to online casino legislation, with revenue up slightly from €56.2m to €59.1m.

The share of group revenue from regulated markets remained at 40%.

Operating expenses increased in Q4, from €157.5m to €172.7m, which the supplier said was driven by higher costs for personnel, new tables in the company’s studios and general expansion.

Martin Carlesund, Evolution CEO, commented on the quarter’s strong results and expansion over the period, mentioning growth in Latam due to Brazil’s upcoming regulation of online casino.

He said: “We see encouraging development in all the regions going into 2024. North America showed strong momentum in Q4 coming back to sequential growth.

“Europe continued its good development from the previous quarter with close to [a] 10% year-on-year growth rate for the second quarter in a row.

“There is still untapped potential in Europe and it remains a region with good potential for Evolution. Asia and Latam are the fastest growing regions year-on-year at the moment.

“Brazil’s announcement of an upcoming regulation of online casino came at the end of the period and is a sign of the rapid development of the market in this region. We will continue to invest in the Latam region in the years to come.”

Full-year 2023 revenue stood at €1.8bn, an increase of 23.5% YoY. EBITDA also saw a spike of 25.7% YoY, from €1bn to €1.3bn and a corresponding margin of 70.5%.

Profit stood at €1.1bn, up from €843m in 2022 and Carlesund added the business will “increase the gap to the competition” in a set of bullish comments.

He commented: “I am proud of what we have brought to market, and I am proud of all team members working for Evolution, constantly pushing boundaries [and] delivering player experiences often beyond what many can dream of.

“But even with a successful 2023 we come into 2024-2025 with higher ambitions than ever. We want to do more – we want to create games that take the entertainment to the next level.

“We want to invent, we want to develop, we want to break new boundaries. 2024 -2025 we will do more for our product, more for our end users, than ever.”

Evolution began 2024 with an investor launching a class-action lawsuit against the firm regarding alleged breaches of the Securities Exchange Act.