Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Evolution AB (EVVTY, Financial) successfully launched several new games and opened two new live studios, enhancing their global presence.
- The company expanded its network by launching the first tables from a new studio in Colombia, serving the LatAm market and supporting Europe and Asia.
- Evolution AB (EVVTY) acquired Arcadia Gaming Solutions, which offers innovative technology for real-time engagement with physical arcade machines via mobile devices.
- The company reported a year-on-year revenue growth of close to 15% for the third quarter, with a constant currency growth estimated at 19%.
- North America showed good momentum with an 18% growth in the third quarter, and the company signed a partnership with Atlantic Lottery in Canada, expanding their reach.
Negative Points
- The company faced operational challenges in Georgia due to strikes and illegal actions by unions, reducing studio capacity to 60%.
- Cyberattacks against their Asian video distribution negatively impacted revenue, with advanced technology used to intercept and redistribute video feeds.
- Adjusted EBITDA margin for the third quarter was slightly lower than expected at 68.5%, below the initial full-year expectation of 69% to 71%.
- The company experienced increased costs due to the situation in Georgia, affecting overall financial performance.
- RNG revenue growth, although positive at 8.5%, was impacted by delays in improvements and enhancements, affecting the overall growth trajectory.
Q & A Highlights
Q: Could you elaborate on the cyberattacks, their impact, and when they started?
A: Cyberattacks have always been present, but there was a significant increase in Q3. It's challenging to quantify the impact, but it involves unauthorized interception and redistribution of our product, leading to revenue loss.
Q: RNG has shown strength in North America. Is this due to overcoming past negatives, or is there another reason?
A: The improvement is due to systematic and methodical progress. We are seeing traction towards our goals, and the RNG portion in North America is growing well beyond 10%.
Q: Regarding the reduced capacity in Georgia, is it mainly affecting low-stakes tables, and has there been any customer feedback?
A: We prioritize high-value tables, so lower value tables are closed first. The situation is not positive, but we work closely with customers to mitigate the impact.
Q: Has the negative publicity from the strikes in Georgia affected your relationship with regulatory authorities?
A: We do not see an effect on regulatory relationships. Regulators base their judgments on facts rather than social media narratives.
Q: Can you explain the impact of cyberattacks on lost revenues and the game round index?
A: Cyberattacks result in others selling our product, diverting players from our games. This affects the game round index as countermeasures may cut deeper than intended.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
