Evolution Gaming reports 54 percent revenue growth in Q1

According to the Interim report for the first quarter of 2019 released Thursday by the company, revenues saw a 54% increase during the period covering January-March 2019.

"Evolution has been off to a strong start in 2019, both in terms of growth and profitability," CEO Martin Carlesund said. "With a favorable start to the year and with high confidence in the upcoming product launches, we currently see good conditions to finish in the upper end of the previously communicated range of 44-46 percent EBITDA margin for the 2019 full year."

The report shows the following changes compared to Q1 2018:

• Operating revenues increased by 54% to EUR 79.3 million (51.6)
• EBITDA increased by 64% to EUR 35.9 million (22.0), corresponding to a margin of 45.3% (42.6)
• Profit for the period amounted to EUR 28.6 million (16.5)
• Earnings per share amounted to EUR 0.79 (0.46)

According to Carlesund, this strong growth is explained by the fact that the company can leverage from the investments made in 2018. Throughout last year, Evolution expanded studio space as well as customer environments and the number of tables and the company can now see how all of this pays off.

"It is our assessment that Live Casino as a product vertical will continue to take market shares in 2019 and why we consequently will continue to invest based on our customers’ demands in our studios also going forward," Carlesund explained. "A demand driver is the reason why we are broadening the Live vertical with new products that appeal to completely new end users; in that way, we can address a considerably larger part of the total online casino market."

As highlighted already in the year-end report, Evolution showcased 10 new games at ICE in London in February, but the new games haven’t had any extensive effect on the quarterly growth, as the roll-out has just begun. Carlesund explained: "It will take time before all the games are available for the end users, and it will then take time for end users to discover the games."

However, one of the main attractions – MONOPOLY Live – has been off to a historically strong start both in terms of player counts and gaming revenues. "We are immensely proud of this launch, which we believe redefines the essence of Live Casino entertainment. Carlesund said. "The unique mix of Live Casino and RNG with augmented reality technology provides something completely new in the market." On a similar theme, the company will soon launch the live game show Deal or No Deal Live.

"Both these titles prove how we to a larger extent are focusing on more entertainment for the player, and we are well underway to create a whole new product vertical in our game lobby that we refer to as Game Shows. Through this, we expand to a much broader group of end users and consolidate Evolution’s position as the leading innovator in the gaming industry," Carlesund said.

"Besides developing brand-new game types, we also continue to innovate our core – the classic table games. This year we look forward to the launches of Free Bet Blackjack, which is the most popular variety of Blackjack at land-based casinos, and our new poker game Side Bet City. We will also expand into dice games with Lightning Dice, building on the success of Lightning Roulette, as well as our take on Sic Bo – Live Super Sic Bo. This means that while we, through the above-mentioned game shows, can reach new end users, we also strengthen our leading offering that appeals to traditional Live players."

The market development in the quarter has been good, not least underpinned by increasing regulation. During the quarter, Evolution went live with customers such as DraftKings in the US, Lotoquebec in Canada, and Svenska Spel and ATG in Sweden. In this way, the share of Live Casino has increased among the operators in more or less every newly regulated or re-regulated market.

Summary of the first quarter:

"With hard and focused work and high energy throughout 2018 and in the first quarter of 2019, we have taken our product portfolio to a whole new level, broadened our own market and created a new market for the industry, which in our perspective makes the gap between ourselves and the competitors wider than ever," Carlesund added. "Our launch pipeline has never been as strong as it is now. Hence, it is my absolute opinion that we have solid opportunities to further extend the distance to the competitors and strengthen our leading position during the remainder of the year."