Evolution remains profitable, strong, equity financed in Q1 2023

Evolution offered investors a preliminary read of its results for the first quarter of the year, with the Q1 2023 results seeing the company post operating revenues increase of 31.5% to €429.6m during the period. The company offered further updates, and specifically on its EBITDA which increased by 30.7% to €300.2m during the quarter with profit hitting €251.2m and earnings per share before dilution at €1.18. This financial snippet puts the company in a strong position, although Evolution is facing some hardships of its own.

The first quarter was marked by the rollout of timed jackpots in the United States with the company’s Red Tiger brand and studio. Evolution also spent the first quarter of the year working on cost controls which have resulted in a positive effect on margin development, the company informed in its financial outlook update.

Group Chief Executive Martin Carlesund offered a lengthy comment on the current situation and what to expect. Carlesund noted that Evolution’s bread and butter remained the Live Casino sector and live casino games, with 83.8% of the total revenue derived from this particular vertical. The rest came from the Random Number Generator (RNG) segment, which includes slot games by NetEnt and Red Tiger.

Carlesund admitted that the RNG vertical could perform much better and said that he was confident in the segment’s future success. This cautious optimism was described in rather more critical terms by Regulus Partners who commented on the development in an email and said that the group had "not worked out how to turn around NetEnt and even a string of better quality slots content acquisitions."

The analysis note argued that Evolution was "filling a hole" in its content library. Meanwhile, Carlesund though said that his company’s ambition was to always continue and deliver on exciting new products and opportunities for players across the globe.

"We strive to increase the entertainment factor, create new games not only for existing players but also for new player categories," the executive noted. He pointed out to the fact that the company has been innovating in the Game Show category, bringing new and never-before-seen products to the market. In 2023 alone, the company plans on releasing 100 games, with the first quarter already seeing 18 RNG titles, the executive reminded.

The group remained profitable, strong, and all-equity financed and was delivering value and justifying stakeholder trust. Evolution though has made changes to the way it groups revenue, putting together the Latin American region in a separate graph while the UK and the Nordics have been added to Europe, perhaps having to do with the fact that these three regions/markets are more mature and are subject to somewhat the same expectations in the long-term.

Evolution had 17,331 employees as of March 31, 2023, with 12,374 people working in full-time positions. Evolution also noted robust growth in Asia, North American and Latin America during the first quarter.