Evolution Revenues up by 27.9% in Q3 of 2024

Evolution Gaming has recently published its financial results for the third quarter of 2024, showcasing a robust 27.9% surge in total operating revenues. This positive trend translates into a year-on-year increase of 14.7% in net revenues, reaching €519.4 million.

Q3 2024 Financial Highlights

• Operating Revenues: €579 million ($553.1 million), up by 27.9%
• Net Revenues: €519.4 million ($553.1 million), reflecting a 14.7% increase
• EBITDA: €417.2 million ($376.2 million), up by 30.3%
• Net Profit: €328.6 million ($292.8 million), an increase of 20.5%
• Earnings Per Share: €1.57 ($1.39), marking a growth of 23%

CEO Martin Carlesund remarked on the company’s performance, stating, “We are witnessing the results of our incremental enhancements in the RNG (Random Number Generator) offerings, achieving an 8.5% year-on-year growth this quarter. We are committed to maintaining an aggressive pace of new game releases across our four brands for the remainder of 2024. Furthermore, the benefits of our Open Streaming Solution (OSS) continue to expand for our operators, with exciting new features like BetWithStreamer, SpinGifts, and AI Slot Recommender set to roll out in the coming quarters.”

Carlesund elaborated on regional performance, noting, “North America demonstrated strong growth, achieving an 18% increase year-on-year. Our Live Casino segment has thrived throughout the year, with consistently increasing play across various states. Although we experienced a decline in RNG revenue and market share earlier this year, Q3 indicates the first quarter of revenue growth in this sector compared to the previous year. Europe has also performed robustly, posting an 11% growth this quarter.”

In contrast, Asia has faced challenges due to recent cyber-attacks, resulting in only a modest increase in revenue from the previous quarter. However, the region holds significant potential, and we are actively addressing the current challenges with the expectation of gradual improvement by 2025. Meanwhile, Latin America is showing promising growth, with Brazil’s anticipated regulatory changes in 2025 seen as pivotal for the market’s expansion over the coming years.

Update on Georgia Strikes

Carlesund provided insights regarding the strike that has impacted operations in Georgia, stating, “This summer, we encountered a challenging situation when union negotiations stalled after two years of discussions. A strike commenced in mid-July, involving approximately 550 employees, although it has had a limited effect on our operational capabilities. It’s crucial to emphasize that Evolution fully advocates for the right of employees to engage in union activities and collective bargaining.”

Currently, we are operating at around 60% of our original capacity in the studio, a level we will endeavor to maintain. Our extensive network of over 20 studios allows us to mitigate the impact of this disruption on our customers. Nevertheless, the overall situation has been detrimental. Fortunately, the situation in Georgia has stabilized, and we are intent on rebuilding and enhancing our capacity across our other studios in the network in the coming quarters to support ongoing growth.

Legal Matters in the U.S.

In a notable legal development, consumer class action representatives Federman & Sherwood initiated a lawsuit in January 2024 against Evolution AB, along with CEO Martin Carlesund and CFO Jacob Kaplan, in the U.S. District Court for the Eastern District of Pennsylvania. The lawsuit alleges that between February 14, 2019, and October 25, 2023, Evolution made misleading claims about its adherence to regulatory standards and the compliance of its clients. Additionally, the suit raises concerns over perceived deceptive statements regarding the company’s growth trajectories and strategies.

Moreover, in March 2024, the law firm Pomerantz filed a similar class action suit against Evolution, targeting allegations of securities fraud and questionable business practices, which reflect the concerns raised by Federman & Sherwood.

The evolving landscape for Evolution Gaming, marked by strong financial performance and regional growth opportunities, is balanced by emerging legal challenges and operational difficulties. The company’s ability to navigate these complex dynamics will be critical as it continues to shape its future in the competitive online gambling sector.

David Burke
London-based reporter covering all facets of the global regulated and unregulated gambling industry, focusing on business news, sports betting, casinos, poker, and regulation.