Evoke revenues rebound in Q3 in first growth period since Q1 2022
Evoke said this was the first quarter of year-over-year growth since Q1 2022, supported by market share gains in its core international markets of Italy, Spain, Denmark and Romania.
The group said despite the good results, customer-friendly sports results during September had a negative impact of £17m on the business. This had the most impact on retail revenue, which dropped 9% on weaker than expected betting net win margins. Sportsbook stakes also dropped across the board, down 10% in the UK&I, 5% in retail and 2% internationally.
Evoke said a new retail managing director had joined the group in September and was enforcing plans to improve trading in the short-term. Over 5,000 new gaming machines will be deployed from October.
However, online revenue, which represents 85% of the business, increased 8% in the quarter.
International gains as 888casino wins in Italy
Looking now at the UK&I, online was impacted by football results, causing betting revenue to decrease 13%. This was offset by gaming gains of 12% to a revenue of £115.2m. UK&I is still the largest segment for the group, making up 39% of group revenue at £162.4m (up 3%).
International markets, which makes up all Evoke’s business outside of the UK and Ireland, made the biggest gains during the period, with revenue for region up 14% to £122.2m. The business makes up 33.5% of the overall group in Q3. Monthly actives in the region were up 11% in Q3.
International growth was driven by a 26% uptick (29% cc) in its core markets, which make up over two thirds of international revenue. This includes strong trends in Romania which Evoke invested further in earlier in October via its acquisition of local brand Winner.
In Italy the operator experienced a revenue uptick of 31% cc with the group’s 888casino brand seizing market share and taking a podium spot for online casino during the quarter. Flutter’s acquisition of Snaitech on 17 September has caused a reshuffling of market share in the region, which may have also had a positive impact for Evoke.
Evoke CEO Per Widerström detailed the group’s turnaround plans in full during the operator’s H1 interim results in August, after it missed its EBITDA target for the six-month period.
A renewed focus on product and streamlining its bonusing process was implemented, as well as various cost-saving efforts.
Cost savings going to plan – Evoke increases Manila footprint
In the Q3 update Widerström said cost savings were being delivered in line with plans, with cash cost savings of £23m made year-to-date.
This has been carried out via simplifying the business model, reducing its layers from 10 to six, and significantly expanding capabilities in Manila to enable further business process outsourcing and automation.
Marketing costs have also been brought down in line with the original plan. Its full exit from the US is expected to close in Q1 2025 following the sale of its New Jersey and Virginia businesses.
Widerström said there was no change to the group’s previously issued H2 revenue guidance of 5%-9% growth year-on-year. Adjusted EBITDA margin is expected to improve to approximately 21%.
“We are achieving our plans to improve trading in the short-term, while simultaneously radically transforming the group’s capabilities for the long-term,” he said.
“Our online business is a clear growth engine and we saw a return to double-digit online revenue growth in our core markets in Q3 2024 underpinned by our focused market strategy and supported by important product investments and the results of our clearer customer value proposition and segmentation.”