Evolution’s cyberattack and IP blocking challenges persist
In a recent earnings call, Evolution Gaming faced investors with challenging revelations regarding ongoing cyber threats and regulatory changes affecting its operations in Asia and Europe.
During the call held on January 30, CEO Martin Carlesund highlighted the continuing risk posed by cyberattacks, which he described as a direct threat to the company’s proprietary technologies. “Someone is stealing our intellectual property,” Carlesund remarked, as he outlined the significant implications these incidents have for the company’s strategic development and market position.
According to Carlesund, the company’s performance in Asia remained stagnant in the fourth quarter of 2024 compared to the previous quarter as they grappled with persistent cyber threats impacting their video distribution services in the region. “We continue to face challenges,” he affirmed.
When pressed by analysts about the potential perpetrators of these cyber intrusions, Carlesund expressed uncertainty: “It would be purely speculative for me to identify any specific group behind these attacks. Much like downloading a movie from torrent sites, the origin is often obscured.” This ambiguity in identifying perpetrators poses another layer of complexity for the company as it navigates the digital landscape.
Despite the cyber threats, Evolution reported a positive year-over-year growth in net revenue from Asia, totaling €201.2 million in Q4—a notable 10.7% increase from €181.7 million year on year, although flat compared to Q3.
IP Blocking and Evolving Regulatory Landscapes
During the same earnings call, Carlesund elaborated on a “marked change of landscape” in both European and Asian markets, particularly as regulators intensify their IP blocking capabilities. “We are fully committed to high-level channelisation and align with regulations globally. Historically, internet access has remained largely unrestricted; however, there seems to be a discernible shift towards blocking by regulators,” he indicated.
In December, the UK Gambling Commission initiated a review of Evolution’s license due to findings that its games were being offered on platforms lacking local gambling licenses. Evolution acknowledged the potential ramifications of this review, which could result in a “range of outcomes” including the revocation of its UK license—a market that presently accounts for approximately 3% of its overall revenue.
In response to these regulatory pressures, CEO Martin Carlesund reassured stakeholders of the company’s commitment to supporting the licensed UK market while actively preventing unlicensed usage. “We are leveraging every available technical resource to ensure our games are accessible only through Commission-licensed operators,” he asserted in a December statement.
Impressive Full-Year Results
In its full-year results announced on January 30, Evolution reported a total operating revenue of €2.21 billion for the fiscal year ending December 31, 2024—an impressive year-over-year increase of 23.1%. The net profit for the year also saw a significant uptick, rising 16.2% to €1.24 billion.
This earnings report marked a pivotal moment as CFO Jacob Kaplan prepares to transition from his role after nine years of service, with Joakim Andersson set to succeed him on February 18. Kaplan’s tenure has been characterized by substantial financial growth, and stakeholders will be eager to see how Andersson will continue this momentum amid evolving market challenges.
