Evolution’s Revenue Soars, But Studio Strikes and Cyberattacks Test Profit Margins
In Q3 2024, Evolution posted strong financial results, with revenue rising by 27.9% to €579 million and net profit reaching €328.6 million.
Steady Revenue and Profit Growth
The year-to-date performance for 2024 shows a 20.1% increase in revenue to €1,588.9 million, with net profit climbing to €866.9 million.
However, Evolution’s EBITDA margin for Q3 reached 68.5%, slightly below forecasts, as the company anticipates stabilization in margins in the last quarter.
Evolution’s North American market showed an 18% year-over-year growth, driven by continued demand in its live casino segment.
Meanwhile, Evolution’s RNG (Random Number Generator) segment, which faced initial performance issues, reported its first quarterly year-over-year revenue growth.
The company is focusing on maintaining a steady pace of new RNG game releases through 2024.
Challenges Impacting Margins and Operations
However, the company has faced notable challenges that have impacted its profitability. The EBITDA margin, which dipped from 70.4% in Q3 2023 to 68.5% this year, has been affected by operational disruptions.
At its Georgian studio, labor strikes in July escalated, studio to scale down its production to approximately 60% of its usual output. Evolution has shifted production to other studios to compensate, but the disruptions have had a tangible effect on performance.
Meanwhile, a surge in cyberattacks targeting Evolution’s video distribution in Asia has also impacted revenue. Although the company has implemented countermeasures, these persistent attacks continue to present operational hurdles.
Additionally, Evolution’s ongoing expansions, including the launch of new studios and increased table operations, have led to higher operational and staffing costs, adding further pressure to EBITDA margins.
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