Evolution has reported a strong fourth quarter to conclude 2023 but, while live casino revenues have improved, RNG revenue has dropped in comparison to the previous year.
Despite the RNG declines, CEO Martin Carlesund has stated he is “happy” with the development seen in this vertical as the company aims for “step-by-step” improvement in 2024.
Evolution sees RNG Q4 revenue fall
Publishing its Q4 results, Evolution declared operating revenues of €475.3m, up 16.6 per cent YoY (Q4 2022: €407.5m), but only live casino operations saw improvements in comparison to the previous year.
EBITDA rose by 20.5 per cent to €337m (Q4 2022: €279.5m), corresponding to a margin of 70.9 per cent (Q4 2022: 68.6 per cent). Profit for the period amounted to €282.9m (Q4 2022: €223.5m), while earnings per share amounted to €1.32 (Q4 2022: €1.05).
For the full year, the supplier reported operating revenues of €1.8bn, up 23.5 per cent (2022: €1.5bn). EBITDA rose by 25.7 per cent to €1.3bn (2022: €1bn), corresponding to a margin of 70.5 per cent (2022: 69.2 per cent).
Profit came in at €1.1bn (2022: €843.4m), earnings per share amounted to €5.01 (2022: €3.95) and the board is proposing a dividend of €2.65 per share (2022: €2).
Carlesund stated: “In addition to the strong financial results, we finished the year operationally very well. During 2023, we added 110 new exciting games to our portfolio, exceeding our target of 100 new games set at the beginning of the year.
“We also made significant progress towards a better supply balance of tables and simply accelerated expansion during the fourth quarter. Currency headwinds remain in the year-on-year comparison, revenue growth at constant currency is estimated to have been 25 per cent in the fourth quarter.”
“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 CEO Martin Carlesund
Per vertical, Evolution’s revenue from live casino rose by 21.1 per cent YoY to €405.6m (Q4 2022: €334.9m).
Carlesund cited that “hard work to improve capacity and focus on expansion the past few quarters has paid off” following the growth of its European studio network in Bulgaria. The supplier now has over 1,600 live tables in total, with at least four new studios planned for 2024, in addition to expansion in existing locations.
RNG revenue declined by 3.7 per cent YoY to €69.8m (Q4 2022: €72.5m), but it did rise sequentially in comparison to the previous quarter.
Although RNG revenue has fallen, Carlesund noted that he is “happy” with the developments made and that the aim is for continued “step-by-step improvements” in the next year.
“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.
“We are going to deliver more exciting games, we will explore new types of games that we do not have today and we will invest in unique games for specific markets. We will yet again increase the gap to the competition. I very much look forward to what I call “the Product Leap” years 2024-2025.”
Region performance & looking ahead
Per region, Europe continues to be the supplier’s main driver of revenue with €185.8m (Q4 2022: €170m), followed by Asia with €181.7m (Q4 2022: €136.2m), North America with €59.1m (Q4 2022: €56.2m), Latin America with €32.1m (Q4 2022: €26.9m) and ‘other’ with €16.6m (Q4 2022: €18.2m).
Carlesund noted: “We see encouraging development in all the regions going into 2024. North America showed strong momentum in Q4 coming back to sequential growth. The quarter also included landmark game launches such as the launch of Crazy Time, a title which has been incredibly successful in other regions.
“We look forward to bringing US players the fun and entertaining experience this title can offer. Europe continued its good development from the previous quarter with close to 10 per cent 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.”
Carlesund concluded that Evolution is looking forward to 2024 with “excitement, hunger and ambition”, as the guided EBITDA margin range for the year was raised during Q4 to 69-71 per cent.
“As a company, Evolution remains profitable, strong, and all-equity financed. As we look into 2024 and beyond, we do so with excitement, hunger and ambition.
“We will continue to invest, recruit and expand our operations in the whole world. 2023 was an intense year and I want to thank the amazing team at Evolution for all the great achievements and I am looking forward to an equally fantastic and hectic 2024 where we will relentlessly continue to strive to make Evolution a bit better every day.”