Evolution revenue climbs 28% despite backdrop of cyberattacks and staff strikes 

Evolution has posted a 27.9% year on year (YoY) total revenue increase, with the supplier’s topline figure coming in at €579m for Q3 2024. 

It marks a steep climb from the €452.6m that was posted in Q3 2023, despite the fact that revenue from the group’s Asia segment was hindered by a flurry of cyberattacks, which CEO Martin Carlesund conceded “negatively impacted the third quarter”. 

There was also a notable rise in EBITDA between July and September, with that metric climbing 30.3% to €415.3m, which corresponded to a margin of 71.7%, from last year’s total of €318.6m. 

It was a similar story for the firm’s profit, which rose €55.8m YoY to now sit at €328.6m.

Dissecting Evolution’s revenue by vertical, €446.9m of the firm’s overall total can be attributed to live games, which is the largest sum generated by that vertical within the last six quarters. 

The upward trajectory of Evolution’s live games vertical was inspired by what bosses described as “increased commission income from existing customers and, to a certain extent, from new customers”, with the demand in online casino games still strong, partly due to the supplier’s continuous launch of new titles. 

The remaining €72.5m was generated by the company’s RNG games vertical, which, much like live games, posted its highest total for six quarters. 

Analysing the group’s results by geography, even in light of the aforementioned cyberattacks, Asia remained Evolution’s top-performing market, amassing a revenue total of €202.2m, though Europe followed closely with €194.9m. 

Growth was also reported in both Latam and the US, with both contributing revenue of €37.4m and €64.8m respectively. 

Much like the two quarters that preceded it, Q3 2024 also saw the share of revenue from regulated markets remain at 39%.

Operating expenses also increased slightly, this time totalling €199.9m, compared to €197.3m in Q2 2024.

That rise in expenses was attributed to higher costs in personnel linked to the launch of new tables in the company’s studios as well as the debut of new live casino studios in Colombia and Czech Republic. 

However, Q3 was blighted by ongoing strike activity by large sections of Evolution’s Georgia-based workforce. 

In July, an alleged 5,000 staff members vowed to walk out amid allegations of unsafe and unsanitary working conditions, alongside harassment and inadequate pay. 

Evolution soon countered that claim by declaring it was only around 550 workers that took part in the strike action. 

Carlesund has since addressed the controversy, which resulted in a downsizing of the Georgia studio, as part of his update following the Q3 results release.

The CEO explained: “During the summer we have faced a difficult situation in Georgia when union negotiations came to a halt after two years of dialogue. A strike was initiated in mid-July, the strike encompassed around 550 employees and had a limited effect on our operational capacity.  

“It’s important to state that Evolution fully supports the right of individuals to participate in unions and other organisations of their choice and to take part in collective bargaining. 

 “However, on 1 August a small number of union-affiliated activists began to illegally block entrances, vandalise buildings, take violent actions and harass working employees, actions that disrupted our operations and forced us to down-size capacity in Georgia.” 

The Evolution CEO also shed light on the fact that the company intends to take legal action against some activists, adding: “The union-affiliated activists have also actively spread lies and disinformation about Evolution. We are taking all legal actions available against this defamation.” 

Carlesund signed off on the topic by issuing an update on the state of affairs, declaring: “Currently, the situation in Georgia is stable and we will continue to rebuild and increase capacity in other locations in the network over the coming quarters to be able to support future growth.” 

Consultancy firm Regulus Partners highlighted signs of what it described as “structural trouble”, most notably the staff strikes in Georgia, where 40% of Evolution’s are entire workforce are based.

The outlet claimed: “While load-sharing across other studios has mitigated the impact of this disruption, it has clearly impacted both growth and margin.”

Regulus also addressed the cyber issues in Asia, adding: “Counter-measures have proved an effective mitigator, but the attacks continue and a cycle of disruption is now likely to mount.

“Whether these cyber-attacks are the work of governments wishing to block unlicensed gambling, competitors, or digital actors with other (e.g, criminal) motives is unclear.”

Last quarter, Evolution agreed to acquire Galaxy Gaming for a fee of $85m, though that deal is not expected to close until midway through next year.