Evolution sees a stock drop after the release of Q2 2024 results and proceeds with the Galaxy Gaming acquisition. Keep reading to learn more.

The Q2 financials for Evolution have raised some concerns, with shares dropping and news about Evolution appearing online. While the live casino games section of the business has seen an 18% growth, RNG gamesappear to be stagnant.

Join us as we take a look at the latest developments and Evolution’s plansfor the future in the article below.

Evolution results for Q2

After the release of the Q2 2024results, Evolution AB's stockdropped by -8.52%, which essentially means that the stock is trading below $100 per share.

The main concern among investors is the decline in revenue growth. Many are also worried that the company's profitability is deteriorating. However, this may be a slight overreactionat the current time. If the collapse continues, then it may call for a strong buy.

If you take an objective look at the Q2 2024 results, you will note that the revenue generated in the second quarter was at €508.40 million, which means it saw a 15% year-on-year increase. On a constant currency basis, there was a 19% growth.

While it is clear that investors expected more than the results show, an almost 9% drop is a bit heavy, considering that revenues have seen a double-digit increase. The company cannot see a massive 20-30% growth every year, and some years will be slower than others.

Another thing to consider is that the EBITDA margin has remained fairly constant, with the results showing at 68%. While it is 1% less, it’s still among the highest, something that is not possible for all companies.

New acquisitions

Evolution has big plans, which can be seen in all the expansions and acquisitionsover the last couple of years. Their most recent acquisition is Galaxy Gaming, which they are expected to purchase at $3.20 per sharein cash for all outstanding shares. The purchase will be done via the Evolution Malta Holding Subsidiary.

The deal is expected to close halfway through 2025, with Galaxy board members holding 14% of common stock. Many have wondered why Evolution would pay so much for a company that is experiencing loss after loss, but the reality is that this acquisition will be highly beneficialin terms of region expansion. Galaxy Gaming holds licenses in over 131 markets globally, including licensing in 28 US States.

This deal follows Evolution's range of slot acquisitions in recent years. Some of the biggest acquisitions include LiveSpins, NetEnt, Big Time Gaming, Nolimit City, and DigiWheel. With this new acquisition, Evolution also gains a significant land-based presence.

According to Galaxy Gaming CEO and president Matt Reback, the acquisition “combines Galaxy Gaming’s thriving land-based business, driven by our industry-leading games and progressive technologies, with Evolution’s global reach and innovative online gaming leadership.”

Is there a need for concern?

There may be slow quarters and slight hiccups, but Evolution is not one of the biggest companiesfor no reason. Over the years, the company has proven itself in terms of its creativity, innovation, and quality designs, not to mention the smart acquisitions and expansions.

Evolution can pay more attention to the RNG side of things, but one never knows what’s happening behind the scenes. Today might be stagnant, and tomorrow could be the day they release a new title that blows the competition out of the water. There was clearly a plan with Evolution's games with RNG, so for now, we’re patiently waiting to see what Evolution will bring to the table.

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Published: July 29, 2024