evolution

Evolution, a global leader in the iGaming industry, saw its revenue grow in 2023 across live and random number generator (RNG) segments, which propelled its net profit to an impressive €1.07 billion (£913.5m/$1.16bn), marking a substantial 27 per cent increase.

Examining the annual figures, Evolution reported a remarkable 23.5 per cent year-on-year revenue growth for 2024. Live casino revenue led the charge with a 28.1 per cent increase to €1.52 billion, driven by heightened commission income from both new and existing customers. RNG revenue also saw a positive uptick, climbing 2.6 per cent to €275.3 million.

Financial highlights

The 12-month period ending on 31st December 2023 proved to be a year of substantial growth for Evolution, with live casino emerging as a standout performer. While operating expenses increased by 25.6 per cent to €688.9 million, the impact of revenue growth led to a notable year-on-year 25.9 per cent rise in operating profit, reaching €1.14 billion. Evolution reported a pre-tax profit of €1.15 billion, reflecting a 26.6 per cent increase. After tax deductions of €77.7 million, the net profit stood at €1.07 billion, indicating a significant 27.0 per cent growth. Additionally, EBITDA experienced a robust 25.7 per cent surge, reaching €1.27 billion.

In the final quarter of 2023, Evolution provided a more detailed breakdown of its performance. Q4 revenue increased by 16.6 per cent to €475.3 million, with live casino revenue growing by 21.1 per cent to €405.6 million. RNG revenue, however, experienced a 3.7 per cent decline to €69.8 million. Geographically, Europe remained Evolution’s core market, contributing €185.8 million in revenue, followed closely by Asia with a total revenue share of €181.7 million.

Year of growth

Live casino accounted for a significant 84.7 per cent of the €1.80 billion in revenue generated in 2023. The company noted that the live casino segment continues to flourish, reflecting the increasing global interest in live casino gaming. CEO Martin Carlesund recently expressed concerns about the operator’s ability to keep up with demand. Following the most recent financial update, he remarked that the company is clearly in a better position to balance supply and demand for its live casino segment than a quarter ago, and the “hard work to improve capacity and focus on expansion…has paid off”.

To address the escalating demand, Mr Carlesund reaffirmed Evolution’s commitment to opening new game studios worldwide. Following the launch of a new studio in Bulgaria in Q4, Evolution plans to establish at least four more studios in 2024. These expansions aim to accommodate the surge in interest and solidify Evolution’s position in the industry.

Guidance and outlook

Despite facing a class-action lawsuit, Evolution remains optimistic about the future. The company increased its EBITDA margin range guidance for 2024 to 69 per cent to 71 per cent, based on its strong performance in the past year. CEO Martin Carlesund expressed excitement and ambition, highlighting Evolution’s commitment to continued investment, recruitment, and global expansion.

Legal challenges

It’s worth noting that Evolution is currently embroiled in a class-action lawsuit, accusing the company of deceiving investors regarding its growth trajectory and compliance. The suit represents entities that purchased Evolution shares between 14th February 2019 and 25th October  2023, alleging that Evolution made misleading statements during this period. The lawsuit seeks damages for investors who purchased securities within the specified timeframe, naming CEO Martin Carlesund and CFO Jacob Kaplan as defendants.

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