Evolution achieves record margins in Q2, operating revenue soars by over 28%

B2B online casino solutions provider Evolution Gaming Group has released its report for the first half of 2023, reporting significant increases in operating revenues and EBITDA, while also achieving record margins during the second quarter.

In Q2 2023, operating revenues increased by 28.2% to EUR 441.1 million ($489 million), up from EUR 344.0 million in the same period last year. EBITDA surged by 30.8% to EUR 311.7 million ($345.7 million), representing an EBITDA margin of 70.7%. Profit for the period amounted to EUR 264.1 million ($292.8 million), compared to EUR 200.9 million in Q2 2022, while earnings per share stood at EUR 1.24, up from EUR 0.94.

Overall, the company's performance in H1 2023 was also notable with operating revenues increasing by 29.8% to EUR 870.6 million ($965 million), compared to EUR 670.7 million in H1 2022. Profit for the first half of the year amounted to EUR 515.2 million ($571.2 million), compared to EUR 398.6 million in H1 2022, with earnings per share reaching EUR 2.41, up from EUR 1.87.

Evolution made notable strides in its RNG (Random Number Generator) operations, with revenue of EUR 69.3 million ($76.8 million) in Q2, a rise of 5.8% from 2022. However, it was the company's Live Casino business that remained the key driver of growth, contributing 84% of the total revenues. Evolution achieved a 33.5% increase in revenue from the vertical in Q2, amounting to EUR 371.8 million ($412.3 million).

Martin Carlesund, Evolution CEO, commented: "During the second quarter of 2023, we continued to deliver good results, with top-line growth and our highest-ever EBITDA margin in a quarter. Although a strong financial result, operationally I feel that we can do more to leverage our execution power to the fullest.”

Martin Carlesund, CEO

“Our ambition is, as always, to manage our costs in an optimal way to deliver good performance and profitability," he added. "We have managed the external challenges increasing our total cost level very well during the first part of 2023. Price increases are still affecting our operations and we do our utmost to limit the impact and constantly increase efficiency in supporting growth.”

Carlesund noted "a lot of progress" in the company's RNG operations during the period, with Evolution up to speed with its game release plan. While the Q2 results in the segment remained solid, the CEO restated that the development towards double-digit RNG growth "will take more time" and that it is not yet growing in line with company targets. 

As for game releases, the successful launch of "Funky Time" in Q2 further bolstered the company's portfolio. The CEO highlighted its popularity among players, with a steady flow of new users engaging with the game, which Carlesund described as "the largest and most complex game" Evolution has created yet, mixing RNG and Live game elements, as well as animated characters and live video.

According to the company, it has an “exciting” roadmap planned for the second half of 2023, with new live games and RNG offerings in the pipeline. The company's RNG roadmap will be "busier" during the second half of the year, and in line with the 2023 target of more than 100 games in total, also including Live games. "This year’s roadmap is our strongest ever and we are planning for an even more exciting roadmap 2024," said Evolution's CEO.

The company is actively pursuing growth opportunities in various regions. In North America, Evolution has expanded its Live game portfolio, recently launching Live Craps in Michigan. The firm is also witnessing a rise in player numbers in LatAm, and has expanded its studio network in the region. Still, Europe and Asia remain today the largest regions for Evolution, both early in launching Live Casino and with players familiar with the product.

Despite facing a tougher macroeconomic climate than last year, Evolution remains confident in its financial position and cash flow generation. With a robust financial position, the company's dividend policy remains intact, aiming to distribute a minimum dividend of 50 percent of net profit over time. Evolution also noted it will keep up with its investments in growth, investing in studios and new locations.