Topline numbersrevenue of €452.6m, up 19.6%, and EBITDA of €318.6m, up 22.1%.
Of the total revenue, €385.8m came from the supplier’s live casino products, up 24.3%.
Evolution’s RNG segment suffered, however, with revenue coming in 1.9% below Q3 2022, at €66.8m.
Overall profit for the quarter was €272.8m, up 23.3%.
Despite the positive results overall, Evolution recognised the need to improve in order to meet the increasing demand for its products and continue to grow.
“We see a higher demand for our product than what we currently can deliver,” said CEO Martin Carlesund in the firm’s Q3 report.
“That is a measure of the phenomenal traction our games have. However, it also means we are not expanding our studios at the right pace.
“We have faced delays, and in some cases not executed fully, in several of our planned studio projects for this year but even more importantly we need to increase the pace of recruitment both in existing studios as well as to support new studios.”
Evolution will therefore continue to invest in its existing network of studios and add new locations, Carlesund added.
The supplier opened a smaller studio in Colombia following the end of the quarter, and plans to open one new studio in Europe later this year to be followed by three or four new studios next year across Europe, North America and Latam.
Elsewhere, Carlesund insisted the company was making progress on its RNG operations, despite a 1.9% year-on-year decline in revenue for the segment.
“Our release pace is now where we want it to be and all new games are from the third quarter on OSS (One Stop Shop),” Carlesund said.“We are methodically and systematically moving our RNG business forward. Our earlier communicated goal for RNG growth remains but at the moment we focus on showing step-by-step improvements.”
On that matter, the company remains on track to reach its goal of releasing 100 new game titles in 2023, Carlesund added, having launched 28 RNG titles and eight live games in Q3.
Ed Young of Morgan Stanley asked management if Evolution’s struggle to meet demand, and the associated difficulty in recruiting and retaining staff, could be related to the salaries paid by the company.
In response, CEO Carlesund said: “We are paying a premium salary for the level of work that we do, and I think that we are at the right level.
“I don’t see that it’s the salary level that has created a situation where we are not delivering to the demand in the market now.
“If that were the case, and we had those indications, our statement would still stand: we will go for growth and market share before margin. So, if I had a possibility to solve that by investing more money or paying more, we would do that.
“But, I wouldn’t do that and waste the owners’ money to throw money at the problem when I don’t think it is the solution. We would invest if needed.”
Current trading and outlook
Regarding guidance for the rest of the year, Evolution reiterated previously issued advice that its EBITDA margin is expected to fall between 68% and 71% for 2023.
“Coming into the final quarter of the year I do expect us to be in the upper end of that interval even with a full focus on expansion,” Carlesund said.
“We face a tougher macro climate today than one year ago and we are underserving the market at the moment, but we will continue to invest, optimise recruitment and, as always, push for growth through focus on product innovation,” he concluded.
With slow progress in the RNG segment and Evolution’s statements on failing to meet market demand, investors showed their caution in the wake of the latest report.
The company’s share price is down by 4.1% to SEK1,010 at the time of writing, having dipped as low as SEK938 after the market opened.
Shares in the company remain down some 29% over the past six months.