Evolution revenues grow by nearly 50% in the first half of the year

Evolution Gaming released Friday its Interim Report for January-June 2019. During the second quarter of 2019, operating revenues increased by 45% to EUR 85.7 million (USD 96.1 M) as compared to the same period of the prior year. EBITDA was up by 63% to EUR 42.7 million, corresponding to a margin of 49.8%, and profit for the period amounted to EUR 34.5 million (USD 38.7 M). Earnings per share marked EUR 0.19 from 0.11 in the same quarter of 2018.

In the first half of the year, operating revenues increased by 49% to EUR 165.0 million (USD 185.1 M) year-over-year. EBITDA grew by 63% to EUR 78.6 million (a margin of 47.7%), and profit for the period amounted to EUR 63.1 million (USD 70.7 M). Earnings per share raised to EUR 0.35 from 0.20 year-on-year.

Evolution CEO Martin Carlesund said the company’s strong development continues, and it can report continued high growth and further improved margin in the second quarter: “2019 is a year of product and innovation, and during the period, we have launched all this year’s new games. The response has been instant, and we are overwhelmed by the positive reception among both players and operators.”

He explained Evolution's aim in the development has been to create games that attract new player types and to expand the Live vertical into new segments, and so far, the company is “very happy” with the outcome. “All games, from the new titles within the Game Show category to the dice games, find their audiences and we see a significant increase in the number of players. The new games are not as staff intensive as the traditional table games, which in combination with a generally high efficiency in all studios contribute to the margin development,” he added.

Furthermore, Carlesund said the extended portfolio also contributes to the revenue growth, but he remarked that most of Evolution’s revenues continue to derive from its core games and that the new games are still in an early stage post-launch. “However, all new titles contribute to a generally higher interest in Live Casino and we believe that the Live vertical will continue to grow its share of the total online casino market. When the Live vertical grows, we take market shares – as do our customers with access to the new games,” he said.

Evolution CEO also highlighted that the positive market development continues, the Nordics are growing, though at a slower pace as the Swedish market now is normalizing following the intense start to the year as a result of the new gaming legislation. The UK continues to stabilize and is growing compared to the corresponding quarter last year. Both rest of Europe and the rest of the world also exhibit favorable growth.

Going forward, Evolution will continue to invest in the development of both additional game shows and other innovative product types, as well as table games to meet the overall demand for Live. The company will also continue to invest in its studios, according to Carlesund. During the quarter, it has transferred the first tables to the new Malta studio, while also expanding the studio in Georgia. In addition, the firm has initiated a doubling of the capacity in New Jersey.

“We will also strengthen our presence in the US further and have started the planning for the construction of a studio in Pennsylvania. All in all, investments for the 2019 full year in absolute numbers will be somewhat higher than in 2018. It is imperative for us to meet the demand for Live, to continue to enable innovation within the company and to constantly increase the gap to competition. Connected to this, it is important to remember that in a case where we must prioritise, we will always put growth before margins,” Carlesund stated.

CEO Martin Carlesund and CFO Jacob Kaplan presented the report for investors, analysts and the media and answered questions on Friday via a telephone conference.