Evoke’s Q1 Revenue Shows Modest Growth Amid Regulatory Challenges
In a trading update released on April 25, Evoke reported that its group revenue for the first quarter saw a slight uptick of 1%, resulting in a total of £437.2 million (€512.5 million/$581.3 million). This figure narrowly exceeded the £431.2 million earned during the same quarter the previous year, but fell short of the company’s annual growth forecast of 5% to 9%.
The first quarter, which concluded on March 31, was shaped by new regulatory measures aimed at promoting safer gambling in the UK, coupled with a decline in sports-related revenues. Notably, the UK and Ireland markets experienced a 1% decrease in revenue during this period.
CEO Per Widerström expressed optimism about the company’s future performance despite the underwhelming quarterly results. He believes that Evoke will manage to achieve its full-year growth targets, benefiting from a projected recovery in revenue growth for the upcoming quarters.
Looking Ahead: Optimism for Q2 Growth Despite Q1 Setbacks
Widerström highlighted that current year-to-date revenue growth stands at about 4% as of late April, positioning the company for improved performance in Q2. He emphasized Evoke’s commitment to "sustainable, profitable growth," with adjusted EBITDA markedly higher than the previous year, exceeding £330 million over the last 12 months.
“The performance in Q1 aligns with our earlier full-year guidance,” Widerström remarked. “Though our revenue fell below our growth expectations, our adjusted EBITDA indicates a more efficient operational framework and an emphasis on value creation."
Online and Retail Segments Experience Contractions in Q1
An analysis of the Q1 figures revealed that gaming operations generated the most substantial revenue, amounting to £291 million, a 7% increase. However, sports betting experienced a notable 8% decline in revenue, attributed to a substantial 14% decrease in stakes to £1.17 billion. Evoke also recorded a drop in active monthly users, down 8% to 1.7 million.
Specifically, the UK and Ireland’s online segment yielded £162.5 million, with gaming contributing £105.5 million, a 3% increase, while sports betting fell by 9% to £57 million, reflecting a 15% decline in stakes.
Evoke attributed these declines to new safer gambling measures and a spike in promotional expenditures from the prior year, which resulted in a 21% decrease in active players. Furthermore, the retail segment in the UK and Ireland also experienced a downturn, reporting a 6% revenue decline to £123.1 million, primarily due to a 9% decrease in sports betting revenue alongside a 7% reduction in stakes.
Despite this backdrop, Widerström pointed out improvements in average revenue per user (ARPU), which rose by 26% year-on-year, credited to better product management and the rollout of 5,000 new machines across retail outlets.
International Growth Bolstered by Romania Acquisition
On a positive note, Evoke’s international segment outperformed expectations, with revenue reaching £151.7 million—an 11% increase compared to last year. This growth was primarily fueled by a 14% rise in gaming revenue to £132 million, although sports betting dipped by 3%.
The international performance also benefited from strategic acquisitions, including Winner.ro in Romania, finalized last summer. Widerström noted that this acquisition would significantly enhance product offerings and localization efforts for customers.
Additionally, the migration of all remaining Mr Green markets to the 88 platform and William Hill Italy to the Exalogic platform further strengthened Evoke’s competitive standing and customer engagement.
“Momentum is building in our core international markets,” Widerström observed. “While the UK and Ireland showed slower performance in Q1, we are taking decisive actions to enhance essential performance drivers, and early indicators from April are encouraging.”
With a focus on effective customer lifecycle management, an appealing value proposition, innovative retail solutions, and a robust product pipeline, Evoke remains confident in its capacity for growth moving forward.