Evoke Q1 revenue flat on tightening UK regulation

Evoke’s Q1 Group Revenue Exhibits Minimal Growth Amid Regulatory Challenges in the UK

In its latest trading update released on April 25, Evoke has reported its financial performance for the first quarter ending March 31. This update highlights the operator’s resilience in navigating a complex regulatory landscape while adapting to changing customer behaviors in the betting sector.

Group revenue totaled £437.2 million (€512.5 million/$581.3 million), reflecting a modest 1% increase compared to the £431.2 million reported for the same period last year. Despite this slight uptick, the figures indicate continued challenges arising from stringent safer gambling regulations in the UK, alongside a notable decline in sports betting revenues. Evoke’s operations in the UK and Ireland experienced a revenue contraction of 1% during this quarter.

While the group’s revenue fell short of its projected annual growth target of 5% to 9%, CEO Per Widerström expressed optimism for future performance. He is confident that Evoke can still meet its full-year targets, citing positive trends and a commitment to operational efficiency.

Evoke Shows Optimism for Q2 with Early Signs of Recovery

Widerström remains confident, stating that revenue growth is anticipated to strengthen starting in Q2, with year-to-date revenue growth currently tracking at approximately 4% as of April 22. He emphasized the company’s strategy of fostering sustainable and profitable growth, noting that adjusted EBITDA for the last 12 months exceeded £330 million, aligning with previously communicated guidance.

“The Q1 performance aligns with our earlier forecasts, and early indicators in April suggest a positive trajectory, with revenue growth year-to-date at around 4%,” Widerström commented. “Despite Q1 revenues not meeting our targets, the significant year-on-year increase in adjusted EBITDA reflects our enhanced operational efficiency and commitment to sustainable growth.”

Analyzing Evoke’s Q1 Performance: Online and Retail Revenue Declines

Dissecting the Q1 performance data reveals that gaming operations were the predominant revenue driver, contributing £291 million—a 7% increase across the group. However, the sports betting segment faced an 8% decline year-on-year, coinciding with a 14% drop in stakes, totaling £1.17 billion.

Evoke also reported a decrease in active users, with an 8% drop leading to 1.7 million average monthly actives. An examination of the UK and Ireland online operations, which remain the primary revenue source, shows that £162.5 million was generated. Here, gaming revenue recorded a modest 3% increase to £105.5 million, while sports betting suffered a 9% decline to £57 million, coupled with a 15% drop in stakes.

The introduction of stricter safer gambling measures and high promotional activity in the previous year were cited as key contributors to these declines, which resulted in a 21% reduction in active players this quarter.

In its UK and Ireland retail segment, Evoke reported a 6% decline in revenue to £123.1 million, attributed primarily to a 9% drop in sports betting revenue stemming from decreased stakes. Retail gaming revenue also dipped 1% to £53.6 million. Despite these setbacks, Widerström noted a positive trend in average revenue per user (ARPU), which was up 26% compared to the previous year, driven by enhancements in product offerings and customer management tools, as well as the deployment of approximately 5,000 new gaming machines across the retail network.

International Segment Gains Momentum Following Romania Acquisition

Evoke’s international operations demonstrated stronger performance, with revenue reaching £151.7 million—an 11% increase year-on-year. This growth was fueled primarily by a 14% rise in gaming revenue, totaling £132 million, although sports betting revenue saw a slight decline of 3% to £19.7 million, corresponding with a 20% drop in stakes. The international segment also reported a significant increase in average monthly users, which rose by 21% to 681,000.

Several strategic initiatives have been pivotal in driving this growth, including the acquisition of Romania-centric Winner.ro, completed last summer. Evoke anticipates that this acquisition will enable substantial product enhancements and improved localization for its customer base. Furthermore, the transition of all remaining Mr Green markets to the 88 platform, alongside the migration of William Hill Italy to the Exalogic platform, is expected to bolster localization and augment competitive capabilities in anticipation of re-licensing efforts this year.

“We are gaining momentum in key areas of our business, particularly within our international markets,” Widerström noted. “Although performance in the UK and Ireland did not meet our expectations in Q1, we have acted swiftly to address the underlying issues and have started to see improved trends in April.”

“With refined customer lifecycle management, a strong value proposition, new retail gaming solutions, and an innovative product pipeline, we maintain a high level of confidence in our market standing and growth potential moving forward,” Widerström concluded.