Evolution Publish Interim Financial Results
Evolution AB (publ) has published its interim report for the first quarter of 2023 (Q1 2022), highlighting strong financial performance across key metrics.
Revenue growth was significant, with operating revenues increasing by 31.5% to €429.6 million (£378.7 million, US$472 million) compared to the same period in 2022. Of the revenue, €69.5 million was derived from RNG-games, while positive revenue development within the live casino was mainly driven by increased commission income from existing and new customers.
EBITDA increased by 30.7% to €300.2 million, corresponding to a margin of 69.9% (70.3). Operating profit amounted to €271.5 million, corresponding to an increase of 31.1%. The operating margin was 63.2% (63.4), while the EBITDA margin was 69.9% (70.3).
Profit for the period amounted to €251.2 million, and earnings per share before dilution amounted to €1.18, representing a 27.1% increase compared to the same period in 2022.
Operating expenses amounted to €158.1 million, driven mainly by higher costs for personnel related to the launch of new tables in the company’s studios and general expansion compared to Q1 2022.
Investments in intangible assets amounted to €10.7 million, during the quarter, mainly for developing new games and technical improvements of the platform. Investments in property, plant, and equipment amounted to €11.5 million and were primarily for new studio space, gaming tables, and other computer equipment to maintain capacity and performance.
Cash flow from operating activities amounted to €277.3 million, while cash flow from investing activities was negative in the amount of €21.7 million, and cash flow from financing activities was negative in the amount of €27.9 million.
As of the end of the quarter, cash and cash equivalents amounted to €759.7 million. The Group’s effective tax rate for the quarter was 7.0% (6.5). After the end of the period, a dividend of €2.00 per share was announced.
Martin Carlesund, CEO at Evolution commented, “A strong start of the year at Evolution. Revenues increased by 31.5 percent to EUR 429.6 million in the first quarter, with 83.8 percent of revenues deriving from live casino games and the rest from RNG. Live casino grew strongly with 36.1 percent compared to last year and revenues amounted to EUR 360.1 million. We continue to see a strong demand both from existing and new customers and good momentum from new games. RNG delivered EUR 69.5 million in revenue, only a slight increase compared to the same quarter last year. As we have communicated earlier, the development in RNG will not be linear towards our target of double-digit growth. I remain convinced that we can perform better in the RNG area, and we are working hard to improve. The underlying growth drivers for online casino are solid and I am happy with the start of 2023.
“The general cost increase and other external challenges remained from 2022, and we continue to address them, every day. We constantly need to find new, better and smarter ways of working to continue to deliver. Be sure that we work hard on this and during the quarter we see an improvement resulting from those efforts. Our priority is always to grow top-line but we strive to do so in a profitable way. For FY 2023, as earlier communicated, we expect EBITDA margin in the 68-71 percent range, and for the first quarter we reported a margin of 69.9 percent, clearly within the communicated range.
“As those who have followed us already know, Evolution’s focus is always on delivering new, exciting playing experiences to our players. We strive to increase the entertainment factor, create new games not only for existing players but also for new player categories. The demands from future generations of online casino players will be different than today. In our Game show category, we continue to innovate and bring never before-seen games to the market. During the first quarter we presented two new live game shows, one is Funky Time, a game that builds on concepts from the very popular Crazy Time but also introduces brand new features. The other headline release is ExtraChilli Epic SpinsTM – a game show built around one of our most popular slots games. It is a new way to play slots – I think it’s best described as “social slots”. You play, chat and win together. Both these games will be launched to players during the second quarter.”