Evolution’s Q2 revenue, EBITDA and profit climbs more than 100%

Evolution has reported a Q2 year-on-year revenue rise of 100% to €256.7m during a sensational quarter. EBITDA increased by 115% to €174.7m, corresponding to a margin of 68% – a record for Evolution – while profit for the period amounted to €144.4m amid a staggering annual upturn of 105%. CEO Martin Carlesund hailed “strong top-line growth and good momentum” during Q2, primarily driven by 59% year-on-year growth in the supplier’s core live casino division. Indeed, live casino provided the bulk of Q2 revenue at €203.7m, derived mainly from increased commission income from existing customers and new partners. Bets from end users across the Evolution portfolio during the period hit €17.5bn. Opex almost doubled to €100.8m, mostly driven by higher costs for personnel connected to the launch of new tables in the company’s studios, as well as general expansion purposes. Evolution’s RNG segment, which includes slots and the acquired NetEnt and Red Tiger business, contributed €53m of revenue in the second quarter. RNG revenue increased slightly from Q1 levels but declined by 2% year-on-year, reflecting a tough comparative period due to the pandemic. Carlesund said the business was in the process of reshaping its RNG roadmap, which should lead to an improvement in revenue growth from the segment in the coming quarters. This growth could come from new titles as Evolution gears up to launch one of its biggest slots this year in Starburst XXXtreme, the sequel to NetEnt’s hugely successful flagship title.

“We believe this boosted sequel will really take the player experience to a completely new level,” said Carlesund. “The joint product team combining the creative talents from NetEnt with Evolution is now also coming up to speed and I look forward to seeing what the joint team will deliver in terms of continued revenue synergies,” he added. The €450m acquisition of slots studio Big Time Gaming completed during Q2 after being announced in April. The business, with its portfolio of slot brands and MegaWays game mechanics, will be fully consolidated from Q3 2021. Other notable events during the quarter saw Evolution expand its presence in the UK through an agreement with Entain for online games across its Ladbrokes, Coral and Gala brands. Meanwhile, in the US, the supplier’s Michigan live casino studio has been approved and is ready for launch. It will become Evolution’s third operating studio in the country. “It is a very active time within the company right now and I very much look forward to the second half of the year to continue to widen the gap on competitors,” Carlesund concluded. “We remain ever as paranoid, and only by working hard to improve our offering step-by-step, day-by-day – and every day – can we reach our goals.” Evolution’s share price climbed by more than 5% in early trading on Nasdaq Stockholm. According to Regulus Partners analyst Paul Leyland, Evolution’s US business grew by 26% quarter-on-quarter and is now almost as big as the UK and the Nordics combined. He said: “That Evolution’s growth is still dominated by live should not surprise, especially given that Q2 online gaming comps are now lapping the first phase of lockdowns. “Equally, it will take more than a few quarters to turn around NetEnt’s weak market share performance – better content needs to be developed to stave off pricing pressure and this is not trivial, especially given Evolution’s lack of organic expertise in this area (Red Tiger and BTG help). “However, Evolution’s bifurcating performance by geography could prove to be a more interesting and important dynamic even than NetEnt’s turnaround potential,” he added.