Evolution, a leading company in the finance industry, has reported impressive revenue growth, surpassing €1bn in net profit. This growth can be attributed to its success in both live casino and RNG sectors. While live casino revenue soared by 28.1% to €1.52bn, RNG only experienced a modest increase of 2.6% to €275.3m. In the fourth quarter, RNG revenue even declined by 3.7% to €69.8m.
Regulus, a prominent analyst in the field, has expressed concerns about Evolution’s RNG strategy. They believe that the acquisition of NetEnt by Evolution was a mistake, as it failed to deliver desired results. Regulus criticizes NetEnt for its outdated content and poor management. According to Regulus, Evolution lacks the capacity to turn around NetEnt’s performance. This criticism raises questions about the value of Evolution’s RNG division and its impact on the industry’s growth.
While Evolution remains the top choice for live infrastructure, Regulus highlights potential warning signs in its geographic expansion. The Asian market’s volatility and regulatory pressure in Europe may hinder further growth. In the US, limited regulation acts as a barrier to expansion, as online gaming is legal in only seven states. The analyst also suggests that political support is crucial for growth in North America.
Although there are challenges, Regulus believes that Latin America presents an attractive opportunity for Evolution. The region is considered the most promising market for the company’s growth.
Regulus emphasizes Evolution’s growing reliance on top clients, with 1xBet being the company’s biggest customer. Flutter and Entain are also mentioned as significant customers, contributing to a 36% growth through organic growth and mergers and acquisitions. However, the long-tail segment of Evolution’s customer base remains flat year-on-year, with 800 customers indicating little growth in this area.
Given its significant influence in the industry, Evolution’s success or failure has a notable impact overall. Regulus warns that relying on acquisitions to counter slowing growth may lead to supply chain issues, especially if the RNG strategy continues to falter.
