Evolution Deep Dive
Announcing the Release of our Evolution Research Report
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Everyone says the house always wins.
But that’s because they haven’t encountered the world of online gambling.
While in theory players choose to play at a specific online casino, just like they choose to play at a land-based casino, in practice the casino game supplier sways where the players end up.
This creates a rivalry between game supplier and casino operator for the player’s loyalty.
So when asking “What happens when you combine one world’s oldest and most profitable businesses with the scale the internet brings?”…
It turns out the answer is the casino operator gets squeezed and increasingly commoditized to the benefit of the biggest game supplier, whose business boasts ~100% free cash flow conversion, 100%+ ROIC, 60%+ margins, and revenues that have grown at a 50% CAGR since 2013.
This game supplier is Evolution.
When they were founded, they didn’t focus on more populated verticals like sports betting or digital slots, but instead created their own category: live casino.
They were the pioneers in the live casino space, which combined real-world dealers who dealt cards in opulent studios with livestreams so players could bet through the internet. The live casino space isn’t just about gambling, it requires building competencies in multiple domains: streaming high fidelity video, software development, creating innovative game concepts, managing thousands of employees, and producing games as if they were television shows.
Evolution has grown an incredibly profitable business and, defying management and investor expectations, margins have expanded every year. But as Jeff Bezos says, “Your margin is my opportunity”, and a 60%+ margin is a lot of opportunity.
Over 40 companies have entered the live casino space with the sole aim of stealing share from Evolution, and they are more than happy to undercut Evolution’s premium pricing. And Casino Operators are just itching for the opportunity to reduce their reliance on Evolution. After 12 consecutive years of winning the Best Live Casino Supplier award, Evolution lost the past two years.
So, will Evolution be able to retain their premium pricing and market share with competitive intensity increasing?
In this report, we go into great detail to address this question, in addition to explaining the industry, the competitive dynamics, and Evolution’s unique position. Our 74-page report also touches on the various markets and regulatory aspects, as well as their ROIC, capital allocation, Reverse DCF Analysis, and many potential risks.
You can find the following and more in our report.
Table of Contents
Founding History.
Business History.
Business.
Gaming Market TAM.
Competition and Competitive Dynamics.
Competition Sprouting Up in Europe, North America, and the UK
Asia Competition.
Threat of Vertical Integration.
Evolution Model.
ROIC and Capital Allocation.
Valuation.
Risks.
Summary Model.
Historical Financials.
Summary Model.
Conclusion
If you aren’t ready to become a member yet, you can just buy the single Evolution Report.
We will cover Evolution in the future on our Podcast, The Synopsis, so be sure to follow us (Apple, Spotify).
