Release Date: April 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Evolution AB (EVVTY, Financial) reported a net revenue of EUR520.9 million, marking a year-on-year growth of 3.9%.
- The company has opened a new studio in Romania and plans to open additional studios in Brazil, the Philippines, and Michigan, indicating a commitment to global expansion.
- Despite challenges, Evolution AB (EVVTY) maintains a strong product roadmap with plans to release over 110 games in 2025.
- The company has surpassed 22,000 employees, reflecting an 8.4% year-on-year growth in headcount, which supports its expansion efforts.
- Evolution AB (EVVTY) continues to see strong momentum in North America, with a year-on-year growth of 15% in the region.
Negative Points
- EBITDA decreased by 1.1% compared to last year, with the EBITDA margin at 65.6%, below the estimated full-year guidance of 66% to 68%.
- The introduction of ring-fencing measures in Europe has led to a drop in revenue in markets with low channelization.
- The company faces ongoing challenges with cybercriminal activity in Asia, impacting revenue growth in the region.
- RNG revenues grew by only 3.1% year-on-year, which was softer than in the previous quarter.
- The European market showed a decline, with revenue down by 6% from the fourth quarter, largely due to the impact of ring-fencing.
Q & A Highlights
Q: Could you clarify the impact of the ring-fencing measures in Europe and when they started?
A: The ring-fencing measures in Europe began in February and contributed to about two months of impact in the first quarter. This proactive measure aims to ensure compliance with local regulations.
Q: Can you quantify the impact of the cyberattacks in Asia on your revenue growth?
A: It's challenging to quantify the exact impact of the cyberattacks in Asia. We've experienced flat growth over the past three quarters, but we are taking actions to address these issues, which should eventually lead to growth.
Q: How has the ring-fencing affected your operations in Europe, and do you expect more markets to be affected?
A: The ring-fencing has been implemented in all necessary markets, and we do not anticipate further markets being affected. The impact is more significant in countries with low channelization.
Q: Can you provide more details on the technical actions taken in Asia to combat cyber threats?
A: We are implementing both technical and commercial measures to solidify our protection against cyber threats. This includes shutting down certain operations while growing others, resulting in a flat revenue outcome for now.
Q: What is the outlook for your RNG segment, given the recent slowdown in growth?
A: The RNG segment's growth was affected by ring-fencing and seasonal factors. We are working to improve our performance, particularly in North America, and expect stronger underlying growth moving forward.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
