Evoke Q1 revenue up 1% on tightening UK regulation and disappointing betting activity
Publishing a trading update this morning (25 April), Evoke sets out certain key figures for its Q1 period. This covers the three months through to 31 March, with full Q1 data due at a later date.
Group revenue hit £437.2 million (€512.5 million/$581.3 million), marginally ahead of the £431.2 million posted in the same period last year.
The operator said it was impacted by new safer gambling regulatory measures in the UK and reduced sports revenues. Its UK and Ireland business saw revenue decline 1% during the period.
The group revenue fell short of Evoke’s annual growth target of between 5% and 9%, but CEO Per Widerström said the group remained upbeat on future performance.
He expects the operator to achieve its full-year growth objectives despite revenue falling below its annual growth target and only increasing 1% year-on-year during Q1.
Evoke optimistic for Q2 amid early single-digit growth
Widerström and the group remained upbeat on future performance. Evoke expects revenue to return to stronger year-on-year growth from Q2, noting that as of 22 April, year-to-date revenue growth is approximately 4%.
He also referenced the group’s focus on “sustainable, profitable growth”. He said adjusted EBITDA was significantly higher year-on-year, taking adjusted EBITDA for the “last 12 months” to over £330 million. This was line with the guidance range outlined during the FY24 results.
“The Q1 performance is consistent with the update provided at our full-year results, with improvements in April supporting revenue growth in the year-to-date of approximately 4%,” Widerström said.
“While Q1 revenue was below our annual growth target, adjusted EBITDA is significantly higher year-on-year. This reflects the group’s significantly more efficient operating model and our clear focus on creating value through sustainable, profitable growth.”
Online and retail declines for Evoke in Q1
Taking a closer look at the data published by Evoke for Q1, gaming operations drew the most revenue at £291 million, up 7% across the group.
In contrast, sports betting revenue dropped 8% year-on-year, following a 14% dip in stakes to £1.17 billion.
Evoke also noted an 8% drop in average monthly actives across the group to 1.7 million.
Breaking this down, Evoke’s UK and Ireland online operations remained the primary source of revenue. In total, £162.5 million came from this area of the business.
Similar to group performance, gaming in UK&I generated the most revenue at £105.5 million, an uptick of 3%, while sports betting revenue fell 9% to £57 million after a 15% decline in sports stakes.
Evoke said both sports betting and gaming were impacted by the introduction of additional safer gambling measures.
It also blamed elevated promotional activity in the prior year, which reduced active players this year by 21%.
The group also reported a decline within its UK&I retail segment, with revenue down 6% to £123.1 million.
Mapping out retail performance, Evoke said that the decline was mainly due to a 9% drop in sports betting revenue to 9%. Again, this was mainly attributed to a 7% decline in stakes.
Evoke plc also saw retail gaming revenue dip 1% to £53.6 million.
Despite the disappointing results, Widerstrom said the company’s focus on increasing its player value was working, as average revenue per user (ARPU) was 26% higher for the quarter over the previous year.
This, he said, was the result of improved product and customer management tools, as well as the completed rollout of some 5,000 new machines across the Evoke retail network.
Romania acquisition props up international growth
Evoke’s international business performed better. Revenue topped £151.7 million, up 11% on the previous year.
Again, this was driven by gaming growth, with gaming revenue rising 14% year-on-year to £132 million. In contrast, sports betting revenue dipped 3% to £19.7 million on the back of a 20% decline in stakes. Average monthly users for the international business jumped 21% to 681,000.
Evoke noted several developments that helped drive growth in the international segment. These include the acquisition of Romania-facing Winner.ro, which completed last summer.
This, Evoke said, would unlock “significant” product enhancements and localisation for customers.
Meanwhile, all remaining Mr Green markets migrated onto the 88 platform during the period. In addition, William Hill Italy migrated onto the Exalogic platform, which Evoke said would support improved localisation and strengthen competitive capabilities ahead of re-licensing this year.
“We are building momentum in the right areas of the business with particularly strong growth across our international core markets,” Widerström said.
“While the UK&I online and retail performance was behind where we wanted to be in Q1, we have moved swiftly to improve some of the underlying drivers of the performance and have been seeing stronger trends in April.
“With improved customer lifecycle management, a clear customer value proposition, new retail gaming cabinets and an exciting product pipeline, we remain highly confident in our market position and the growth profile of the business.”