Evolution posts record $477M group revenue in Q3, driven by surging demand in live casino

B2B online casino solutions provider Evolution saw group operating revenue increase by 19.6% in the third quarter of 2023, reaching a record-breaking figure of $476.9 million (€452.6 million). Growth was fueled by a surge in live casino revenue, up 24.3% to $378.09 million (€358.8 million). Evolution also disclosed a 23.3% increase in net profit during Q3 to $287.4 million (€272.8 million).

While the growth is a positive sign, Evolution’s CEO, Martin Carlesund, has expressed concerns about the company’s capacity to maintain this rapid upward trajectory. He specifically alluded to the current studio infrastructure’s inability to keep up with the burgeoning demand for their live casino offerings.

Highlighting this issue, Carlesund stated: “Our live casino revenue grew to $406.55 million (€385.8 million) for the quarter. And we see a higher demand for our product than what we currently can deliver. That is a measure of the phenomenal traction our games have.” 

In response to these challenges, Evolution has unveiled a strategic plan for the expansion of its studio presence and staff recruitment across multiple geographical regions, including Europe, North America and Latin America.

However, Carlesund pointed out that the company’s studio expansion projects for this year are lagging behind. “We have faced delays, and in some cases not executed fully, in several of our planned studio projects for this year but even more importantly we need to increase the pace of recruitment both in existing studios as well as to support new studios,” he stated.

The company is now working to get back on track in its existing locations and adding new ones. Evolution opened a smaller studio in Colombia just after the end of the third quarter and plans to open one new one in Europe later this year; and three to four next year in Europe, North America and LatAm.

RNG sees decline

In terms of Evolution’s RNG (Random Number Generator) games segment, there was a 1.9% decline in revenue during Q3 to $70.4 million (€66.8 million). Carlesund, however, remained optimistic about the company’s prospects in this area.

He emphasized that the release pace for RNG games has now reached the intended level, with all new games available through the One Stop Shop (OSS) from Q3 onwards. “Our earlier communicated goal for RNG growth remains but at the moment we focus on showing step-by-step improvements,” the CEO said.

Carlesund acknowledged that while the RNG segment experienced a temporary slowdown in growth, external factors played a significant role, with fluctuating currency exchange rates affecting top-line growth. The strengthening of the Euro against most currencies also had a negative impact on revenue growth throughout the year.

“Players deposit and play in many different currencies with our operators, the resulting GGR is converted to Euro which is the base for our invoicing,” said Carlesund. “In the third quarter, we estimate six to eight percentage points [of] negative headwind on revenue growth from currency effects when comparing revenues to the same quarter last year.”

Europe continues to drive Evolution’s growth

Examining the geographic distribution of Evolution’s revenue, Europe continued to lead with a total revenue of $184.52 million (€175.1 million) in Q3, representing a 10% year-on-year increase.

However, the Asian market is fast catching up and is poised to potentially surpass Europe in Q4. The Asian market experienced a growth of 34.7% year-on-year, resulting in revenue of $181.35 million (€172.1 million).

North America, with its burgeoning online casino market, exhibited a steady 8.4% growth in the same period, despite a slight drop in RNG revenue in the third quarter. The revenue from North America contributed to about $57.64 million (€54.7 million).

Meanwhile, Latin America demonstrated growth with a 39% increase in revenue as it recorded $36.25 million (€34.4 million).