Welcome to the Evolution Audio Cast for Teleconference Q4 2021. Today, I am pleased to present CEO Martin Carlesund and CFO Jacob Kaplan. For the first part of this call, all participants will be in listen-only mode, and afterwards, there'll be a question-and-answer session. Speakers, over to you.
Good morning. Welcome, everyone, to the presentation of Evolution's year-end report 2021. My name is Martin Carlesund, and I'm the CEO of Evolution. With me, as always, I have our CFO, Jacob Kaplan. I will start with some comments on our performance in the quarter, where after I will hand over to Jacob for a closer look at our financials. After that, I will round off the presentation with an outlook for the rest of the year, and then we are happy to take your questions. However, before going to the next slide, I want to comment on the picture you now see. It's a real photo of one of our latest astonishing studios. It's a studio for the coming product, Gold Bar Roulette, and this is just awesome. The game and the play experience and the new logic in this game is something really extra.
Just want to point that out. Thank you. Now, next slide, please. I'm very satisfied to be able to present yet another strong quarter for Evolution, driven by the entertainment of end users and the increasing preference of those. The products we launched during the year in combination with the continued strong market development and global demand have contributed to a very high growth rate. Furthermore, we also experienced strong results from the investments in increased studio capacity. In the end of the quarter, we had over 1,000 tables live, resulting from an increase of 300 tables during the year. These factors, in combination with the constant pursuit of cost efficiency, has positive effect on our margin. While we had operational challenges due to the pandemic, the truth is we also learned a lot.
It proved that our business model is resilient and that our customer base gets stronger every day. We also had to learn how to adapt to new situations as a result of the pandemic, and we proved that we are in the forefront of innovation and creativity. Our other aspects of the pandemic are also that it made people more comfortable with video streaming and that most people improved their connectivity from remote locations, such as your home or even when you're on vacation. The pandemic has simply increased the worldwide connectivity and pushed bandwidth and latency to new levels, which has in turn created very good fundamentals for the future of our games. During this last period, we have also, with our cutting-edge technology and innovation, been able to appeal to entirely new player demographics and engage new player types.
Regulation of online gaming continued to gain ground all over the world. On the first day of the quarter, the newly regulated Dutch market opened up, and we are already powering an absolute majority of the licensed operators. We expect the Dutch market to expand further as the number of licenses increase during 2022. It's important to note that already in December, the regulated Dutch market passed the pre-regulated levels. Our growth in North America is a great opportunity. In October, we launched the RNG games in Connecticut while live games will be launched in the near future. Also in the quarter, we went live in the regulated province of Ontario with OLG, the Ontario Lottery and Gaming Corporation. The market for commercial operators in Ontario is planned to open in April.
In the quarter, we also announced that we were first to market with Live Casino in Argentina's newly regulated business at Buenos Aires province. With Colombia already regulated and live with Evolution and more provinces and countries working on regulation, Latin America is a promising market. Also at the end of the period, we renewed our existing agreement with FanDuel Group to become FanDuel's selected provider of online Live Casino across the entire U.S. We have invested significantly in the U.S. market and will continue to do so in the years to come. As I stated before, the demand of our products is truly global, and we are expanding our studio capacity in all locations. Coming out of Q4, I still see that we are under-supplying to the demand, even if we double the number of employees during the last 18 months.
Again, I reiterate, we will continue to expand and work with high speed throughout 2022. Now, let's move to the coming slides and see the effect on numbers and products of all our efforts. Operator, next slide, please. I'm pleased to present our strong results for both the quarter as well as the full year 2021. Operationally, it's been a very hectic year for us, and in the fourth quarter, we continued the momentum from the previous quarters. Revenues increased by 69% to over EUR 300 million. EBITDA increased by 115% to EUR 207 million, corresponding to a margin of 68.9%. The margin for the full year ended on 68.7%, slightly above our guidance for the year.
In a year with such strong expansion, I consider increasing margin in 2021 as an achievement. In 2022, we continue to invest in our expansion, both in studios, in games, but even so, I expect that we will be able to strengthen the EBITDA margin for 2022, ending somewhere in the range between 69% and 71%. In this context, it's important to state that investments will continue to be high, margin might vary quarter-on-quarter, and if there is a trade-off between growth and margin, we will always prioritize growth. Live Casino delivered a very satisfactory growth of 49% compared to the Q4 last year.
RNG revenue amounted to EUR 62.9 million with a growth of 9.4% compared to the combined revenue of NetEnt and BTG during Q4 2020. Moving forward into 2022, the path to growth within RNG will not be linear, and I expect the growth rate to vary through the next couple of quarters. With a fantastic pipeline of slots in 2022 together with the new technical platform, I have high expectations for growth in the little bit longer time perspective. All in all, fantastic numbers, and I'm very pleased with our financial performance in the fourth quarter, and we are definitely well-placed to deliver a strong 2022. As always, we will relentlessly further strengthen our market share and continue to widen the gap to competitors. Next slide, please.
Bet spots is to be seen as an indicator of activity in our Evolution live network. The number of bet spots from an end user amounted to 20.9 billion, which is a phenomenal increase of 15% from Q3 and compared to Q4 last year growth of 37%. The general player activity has continued to increase and the player activity in the beginning of Q1 has accelerated further. Crazy Time continued to conquer the world and is one of the biggest success stories in online gaming of all time. In Q4, the game saw exceptional player activity growth combined with a very high user preference with millions of unique players enjoying the game. We can also reveal that the game generated some huge wins for players during Q4 with multiple mega payouts.
The top five wins alone paid out EUR 50 million in the quarter, the biggest one being over EUR 20 million, making it the largest non-progressive payout ever in the online gaming world, benefiting thousands of players. Next slide, please. Expanding our studio capacity means that we need a high recruiting pace, and in the quarter, we hired about 1,200 new employees. Increase in stock 2021 amounted to 3,900 corresponding to an increase of 41%. If we extend the perspective to end of Q2 2020, an 18-month period, Evolution doubled in size. Expansion at this rate is very costly, but even more important, to double a company the size of Evolution in 18 months takes energy, ambition, and pure will.
Most would even say it's impossible, but when you see this, don't forget that it's the way everyone in the Evolution team pushed forward, create what others dream of. At the end of the period, we were more than 13,000 Evolutioners, and we will continue to increase headcount. Recruitment is therefore one of our key processes, and the well-being and development of our employees is key for Evolution. We're a company where everybody should feel welcome. We constantly and every day work to be better and see education and development of everyone as a core process. We are demanding and fair and want to create a unique work environment guided by true and really sound core values. I'm humble and very proud of all employees that make up this fantastic company. Operator, next slide, please.
2022, the year of product and innovation. We kick-started it yesterday with an online event where we introduced 25 new fantastic games. Before the end of this year, we will launch 88 new games in total. It's a record number of releases from Evolution in one year, and it showcased the breadth of our exceptional portfolio. We need to innovate, we need to entertain, we need to deserve the end user's time. We need to develop games for the future. No one can believe that continuing doing the same thing for the coming five years will make the future and end users happy. Don't copy, develop. Don't take for granted. Move with desire. The end users of tomorrow will be picky and have loads of options. Evolution's DNA is to continue to create the games of the future, entertaining these end users.
One thing we should think of, as we all know it, the future will be different from the present, and standing still will not make your success. Evolution has completed a series of acquisitions that have further strengthened and diversified our comprehensive content and technology portfolio, all fitting our strategy, where all parts have a role to play. Together with one-stop shop, the seamless and flawless single-point integration, the new lobby will help our customers to thrill their users. With one integration through our fantastic new lobby, all Evolution content will be delivered seamlessly to operators all over the world. When you see our products for 2022, don't forget that we have put desire, sweat, and tears into it. Thought of each part, making it worth something, pushing the boundaries. That's who we are, relentlessly pushing forward. Next slide, please, operator.
First games launched this year are Peek Baccarat and Bac Bo. Peek Baccarat is a unique and revolutionary version of classic face-down Baccarat. Revolutionary because it's the only Baccarat in the world that lets the player take a peek and increase their bet after the normal betting time is over and some of the cards have been dealt. Bac Bo is sort of a simpler version of Baccarat, but with a unique twist. It's played with dice, not cards. Think quick-fire dice, more excitement, and payouts up to 88 to one. In Bac Bo, the team and everyone involved has brought out the best in Baccarat and Sic Bo, and we are seeing one of the most successful launches in recent times. In our RNG vertical, with our world-class slots offering an IP, I'm confident that we will reach higher growth for RNG.
However, the road to increased growth will not be a straight one, and I expect growth rate to fluctuate in the year to come. Some of the slots we launched in 2021 were successful and well received by players. However, in 2021, we need to continue to deliver equally successful games as in 2021, but at a higher pace. With 88 new games this year, I have high expectations for the full year. Yesterday, Nik Robinson, CEO of BTG, said that 2022 is possibly the most exciting year in a 10-year history. With action-packed online slot games based on TV show Knight Rider from NetEnt and Narcos Mexico from Red Tiger, we will deliver the best and most innovative slots in the world this year. I'm very glad that DigiWheel has recently become part of Evolution family.
DigiWheel is the world's first rotating HD digital gaming wheel and one of the most innovative products ever created in the casino world. The device is unique, and all casino operators, offline and online, can enjoy the most successful wheel game ever created. The Evolution roadmap of 2022 is simply the best one ever. Next slide, please. This slide shows the breakdown of our revenue by geographic region. We continue to see an increased demand for online casino across the globe. We expanded the number of tables with over 300 during the year. However, the demand is so strong we are still underserving in several markets. In Asia, we saw continued growth which amounted to 128% for the full year. We have been successful with tailored content for this region and its players.
The new product launches, game variations of Baccarat, as well as other games with an Asian flavor to them, have worked very well. North America is also growing fast with a year-on-year growth amounted to 205%. We see good potential in North America in the North American market and expect continued high growth rate going forward. We don't focus on guessing on which state will regulate next. For us, it is still fantastic opportunities in the states that already regulated, and we see growth rates on high levels going forward. European markets in general have a slower growth than the North American and Asian markets due to both regulatory changes as well as that they are more mature. However, we still see good opportunities in Europe. Rest of Europe had a year-on-year growth of 55%.
The Nordics and UK are about the same size with the year-on-year growth in the UK amounting to 85% and in the Nordics amounting to 146%. The growth year-on-year can, on these two markets, to a large extent be attributed to acquisition of NetEnt, which has a strong position in the Nordics and the UK. Other, including South America, Africa, and remaining part of the world, shows good growth of almost 7% year-on-year. Revenues from regulated markets increased to 41% in Q4. Now, I will pass on to Jacob for a closer look at our financials. Next slide, please.
Thank you, Martin, and good morning to all of you on the call. We'll now move on to a couple of slides with a closer look at financial development during the period. I'm on slide number nine. Revenue amounts to EUR 300 million in the fourth quarter. That's made up of EUR 237.4 million related to our Live Casino product and EUR 62.9 million from our RNG games. We're happy with the development of both product lines in the fourth quarter. Compared to the same quarter 2020, Live Casino increases over 48%. This compares well to the pre-pandemic growth rates from 2019. RNG revenues increased just over 9% compared to the pro forma figures for the fourth quarter 2020, including Big Time Gaming and NetEnt for the full quarter pro forma.
Total revenue compared to the reported revenue Q4, that is EUR 177 million that's shown in the chart here. That growth is 69%. I would say RNG development is in line with our expectations from earlier in the year. Our ambition, as Martin pointed out earlier also, is to increase growth and reach double-digit growth during next year. I see that, realistically, I see us reaching that more towards the end of the year. If you look at the numbers, 10% growth compared to Q1 2021 would mean a bit over EUR 67 million RNG revenue in the first quarter of this year.
As you see also in the table here, RNG revenue has been relatively flat over the quarters this year, EUR 61.2 million in Q1, EUR 62.9million in this quarter. It will take a few quarters to get growth up and achieve sustainable double-digit growth, and I don't see us hitting EUR 67 million in Q1. However, as Martin mentioned, we feel good about the roadmap, and any increased growth will start there with great games that players enjoy and come back to. We'll take it step by step, but don't expect a linear increase of the growth percentage from Q4 into 2022. EBITDA for the quarter amounts to EUR 206.9 million and an EBITDA margin of 68.9% in the quarter.
This is in line with our latest margin guidance from Q3 of margin exceeding 68% for the year. Also mentioned last time we spoke, and Martin pointed it out earlier on the call, we are in a period of very heavy expansion. We end the year with over 1,000 tables in operations. We're investing in all studios, adding more staff and more capacity than we've ever done before. North America is one area where we've continued to expand all functions of the company. We are moving towards 2,000 staff. We see fantastic long-term potential in the market, and we're really building for the future there. The expansion, however, does drive costs and will affect margin some during 2022. For the full year 2021, we reached an EBITDA margin of 68.7%.
Margins have been relatively stable this year, around 68%-69% each quarter. Q3 was a notch higher at 69.9%. Margin full year 2021 is up significantly from 2020. For full year 2020, we had 62.7% EBITDA margin, so almost 6 percentage points up. For full year 2022, we don't expect the same step-up in margin. As pointed out earlier, we see that we can reach a margin full year 2022 in the range of 69%-71%. That's our guidance for 2022. I'll repeat that, as we've done so many times, that we'll prioritize growth over margins if we're faced with that trade-off. All right, operator, let's move to the next slide, please. This slide shows our P&L in a bit more detail.
From the top, live revenue of EUR 237 million in the period October to December 2021, and RNG just under EUR 63 million. We covered the developments in this period compared to same period prior year on the previous slide, so I won't repeat that here. This slide, I should point out, also shows the reported figures for 2020, so no pro forma adjustments in the 2020 columns on this slide. Full year 2021, live revenue is EUR 839 million, and that is an organic growth compared to 2020 of over 54% for the full year. Total revenue is EUR 300 million. That's an increase of 69% compared to the reported revenue, Q4 2020.
Looking at the full year revenue amounts to EUR 1.068 billion, an increase of 90% year-on-year. Then that, of course, includes both organic and acquired growth. Moving down to expenses, since there's no pro forma in here, the addition of our acquired businesses during 2021 is of course a part of the explanation of each of the lines, but then also our Nyxian operations have increased in expenses, so both affect here. Moving through the lines, support personnel expenses amount to EUR 65.2 million. That's an increase of EUR 16.6 million compared to the same period last year. Depreciations amount to EUR 22.4 million.
That includes about EUR 10.5 million in amortization of intangibles related to the acquisitions of NetEnt and Big Time Gaming. Other operating expenses, that includes a number of items, consumable equipment, communication costs, consultant royalty fees, is a big part of that. The line amounts to EUR 38 million in the quarter. The corresponding period, 2020, here includes EUR 19.4 million in one-off restructuring costs. Adjusted for that one-off item last year, the increase is EUR 14.6 million in this quarter compared to the same quarter 2020. That's instead of the reported number that, as you see here in the table, is actually higher in the same period, 2020.
Summing up, total operating expenses total just over EUR 115 million for the period October to December 2021, and for the full year, almost EUR 415 million, an increase of 71% compared to the reported figures of the same period last year. Operating profit sums up to EUR 184.5 million in the quarter. Our tax is at EUR 12.7 million in the quarter. That's a tax rate of 6.9%. For the full year, tax rate is 6.5%, and that's up from just under 5% in 2020. A slight increase there.
All this sums up to a profit for the three-month period of EUR 171.6 million, which equals an earnings per share of EUR 0.77 per share for the quarter, an increase of 89% compared to the fourth quarter 2020. Full year earnings per share is EUR 2.73 per share, an increase of 81% from the previous year. All right, let's move on to the next slide, please. Before I hand back to Martin, we look at cash flow and financial position. Starting with the chart to the left in the slide, this shows development of capital expenditure. The gray part of the bars represents investment in tangible assets. That is mainly our studio construction. It's a step up this quarter from previous quarters to almost EUR 14 million.
Main driver of the increase is our investment in our North American studios. We're expanding in all studios, and as pandemic restrictions have slightly scaled back, we've been able to increase the pace there during the period. As we mentioned earlier, we continue to invest heavily, not just in the U.S., but in all studios. Ongoing projects include the new studios in Madrid and also in Armenia, as well as our fourth U.S. studio in Connecticut. Lots going on in pretty much all locations. The blue part of the bar is investments in intangible assets and is related to development of new games and features to the platform. It's EUR 8.4 million in the quarter.
That's up a bit, compared to the same quarter 2020, but now also includes development of NetEnt, Red Tiger, and the Big Time Gaming games. Yesterday, we presented our 2022, I should say, roadmap. I'm sure many of you saw it or will see it and you'll see that we launched close to 90 games this year. Investments in intangible assets are also set to continue at a high pace. CapEx for the full year 2021 amount to EUR 60 million, which means that the pickup in pace in Q4 meant that we actually reached our full-year guidance of EUR 60 million this year. Looking ahead to 2022, I estimate that we will have a CapEx of about EUR 90 million.
more or less maintaining the current level that we see in the fourth quarter. All right, moving on. In the middle of the slide, we show operating cash flow. Cash flow was good in the quarter, over EUR 156 million, slightly lower from Q3 due to, among other things, the higher investments. Cash conversion percentage on the rolling 12-month basis is 75%, so still at a good level. Finally to the far right in the slide, quick look at the balance sheet. EUR 421 million in cash at the end of December. Out of that, EUR 303 million is the proposed dividend for 2021.
We also have roughly EUR 66 million that will be used for the compulsory buyout of the remaining NetEnt shares that did not come with the share offer last year. That will take place now also during the first quarter. We also have about EUR 80 million remaining in the share buyback program that was initiated in December. That will also continue now. All these payouts considered, we will reduce our cash position during the first half of this year, but we maintain a good cash flow and an overall strong financial position. That was the end of my prepared comments. I'll stop here, hand back to you, Martin, and we'll take questions after. Martin?
Thank you. Well, I'm on slide 12, last slide before questions. Thank you, Jacob. A few words to conclude this report presentation. 2022 will be the year of product and innovation. A great year started. We will release a record number of new innovative exciting and fantastic products, exciting games entertaining the end user. This is all possible because of the great persons in Evolution and the teamwork between all of you. In the last quarter, several new markets regulated, and we were first to market in all of them. We will in the year ahead continue to our expansion in the world, and we will continue to develop the best and most innovative games. We have always been the one to push boundaries, to push the realm of what's possible when it comes to online casino.
We've entered 2022 with a good momentum, and our tight teamwork and speed will keep us moving forward to yet another great year. We always stay on our toes, as paranoid as ever, and we are never laid back or content. We always look forward to the next opportunity and the next challenge. Thank you all for listening, and we'll speak in a couple of months again. Now, let's move to the next slide and questions, please.
Thank you. If you wish to ask a question, please dial zero one on your telephone keypads now to enter the queue. Once your name is announced, you can ask your question. If you find it's answered before it's your turn to speak, you can dial zero two to cancel. Our first question comes from the line of Martin Arnell of DNB Markets. Please go ahead. Your line is open.
Hi. Good morning, gentlemen. I hope you can hear me.
Good morning. We hear you almost loud.
Yeah, great. My first question is, if you could comment a little bit about the trends so far in 2022. I think you mentioned that player activity has been good in the start of the year, but can you say anything more?
I stated we come out of the Q4 with good momentum. We're starting the year with good momentum, and Q1 has started well. Good.
There's no change in trends so far at this point?
No change in trends, I would say.
Okay.
We're starting well.
Yeah.
Thank you.
It is, yeah. True.
Okay. Thank you, guys.
Thank you.
Thanks.
On the U.S. expansion, when do you expect to be ready with the Connecticut studio for the Live Casino? When do you expect that in the near term, or is it later in the year?
We're in the building phase right now, and we hope to go live soon. Before summer is probably.
Okay.
Before summer. First half before summer.
Yeah. Okay. Excellent. Thank you. Well, you're about to broaden your product portfolio in the U.S., and that was pretty clear yesterday from the presentation as well. How easy can you do that? How easy is it to get game shows certified, et cetera, for the U.S. states?
Good question, I must say. It's always a challenge. First of all, the regulatory environment in the U.S. is live, and live is new to them. It's something that is new. It's a process. You need to work with the regulator and see to it that they are comfortable and knowledgeable when it comes to the new product. It will take a little while, but of course, naturally, we've been working on that for quite some time.
Okay. Thank you. Could you just clarify, I think I overheard on the presentation yesterday that you could use your European studios for Canada, Ontario. Is that correct?
That is correct. The commercial market in Ontario can use our studios from Europe, yes.
Okay. Thank you. Just finally also on these acquisitions that was out late last year. Are there any sort of comments you want to make on the dialogue that you have with the New Jersey Division of Gaming Enforcement? Is there anything that has changed from your perspective from these acquisitions?
There is nothing new, and nothing has changed. We have had a quarter where essentially we've been in contact with many of the regulators as part of usual, and we're working on the processes as you also see in the CEO comments, and we always find things to enhance and do better in all areas, and so also this one.
Okay. I must just finally ask you on, you know, what are you gonna do with all that cash on the balance sheet? How are the discussions going there in the board, do you think? Is it purely dividends or are you having a deal flow when it comes to M&A? Maybe you could add technology for the future product, et cetera. How should we think about that?
Yeah, I think I mean, the main way to shift capital back to shareholders will be dividend. We have a dividend policy of 50% of earnings. I think that will be the main tool. As we see right now, you know, with the planned dividend and the compulsory buyout and the buyout program that's in progress, you could say, you know, the cash position will reduce during the first half of the year. Of course, yeah, we do have good cash flows and, you know, hope to be in a position with the, you know, to have this question again in the future.
That's the same as always. Of course on the M&A side, we've said before we will, you know, be opportunistic in that. We listen and we look, but our main growth strategy is organic growth. It's about everything we showed yesterday. The more products, better products, that's the main growth avenue.
Of the new live games, Martin and Jacob, what are you most excited about? If you have to pick, one or two?
Oh, that's a little bit like asking which child of yours are the best one. I mean, we love them all. There are many, many great games coming 2022.
Okay. Thank you guys. That's all for me. Bye.
Thank you.
Thanks, Martin.
Thank you. Our next question comes from the line of Ed Young at Morgan Stanley. Please go ahead. Your line is open.
Hi. Good morning. I've got just three questions. The first one's on your North America ramp. It was up 6% quarter-on-quarter. You've said, obviously growth there is lumpy as you work up capacity. I wonder if you could perhaps give a bit of color on how you expect that to develop over the course of the year and whether you'd be able to quantify the impact of the Canada switch off within that North America number. Thanks.
Good morning, Ed. Yes, a good question. We don't quantify the growth in different markets, but to try to give you something, I would say like, of course, we're coming into 2022. We're in a ramp-up expansion phase in all states in the U.S. That ramp-up is of course being challenged with COVID, and it's been a little bit back and forth for us. We look forward to coming out of COVID and being able to expand faster, simple as that, then take a larger part of the market. We look forward to that. On top of that, we're also in the licensing and regulation phase of new games and expanding the portfolio. In my dream scenario, of course, we will have the full product suite tomorrow.
It won't be tomorrow, but as soon as possible for all American players, and that will also enhance the player experience and also of course the market share. When it comes to Canada, we haven't. It's been hard and we haven't stated that. We look forward now to the commercial opening of the market in actually the second of April, and look forward to a good growth on that market as of April and onwards.
Okay, thanks. My second question, you mentioned yesterday that 10% of your customers have moved onto the one-stop shop with, I think 30% of traffic expected by the end of Q1. Can you just talk broadly about what you've seen from the first movers? Obviously, they have access to more of your content. Are they on average taking more of your content onto OSS? And is that how we should think about improvements in cross-sell and RNG growth through the year? Is it partly related, do you think, to uptake of OSS?
I think that you should think of OSS in a long-term perspective as we talked about being the leader in online casinos, seamless, flawless integration, all customers to one. We drop the product, boom, it's possible, it's compliant, it comes out in regulated markets and others, in one strike or one blow. It will make the life of the operator simpler. They will have our lobby. They will connect in one place. I don't expect immediate effects of that. Of course, when we roll out the product into new customers and they get more, you will see that effect. But I don't see that as a bump up. It's more a gradual effect over the time to come.
Okay, thanks. My final one-
It's something fantastic. Sorry.
My final one was.
Sorry.
My final one was on costs. It looks like the big move on costs quarter-over-quarter was other operating costs up to EUR 38 million from the low 30s. I know that's a lumpy line. But could you talk a little bit about what's driven the quarter-over-quarter rise there? Is that the new normal for other operating costs? Or should we expect that to revert a little bit more towards a more normalized level going forward? Because if I look at your staff costs, for instance, it looks like actually, you know, your like-for-like staff costs have continued to be deflationary. So I'm just trying to think about the margin outlook, I guess.
Okay. I will start and I will hand over to Jacob. What I tried to emphasize with the report and also earlier is that, I mean, we doubled the company in 18 months. We employed 6,700 people on top of 6,700 in 18 months. That drives cost in a lot of different areas. You have to staff up, you have to see to, you have to make it work. It's a heavy lifting to do that. I think that, which I also tried to state, is that we maintain and have a fantastic margin of 69% in the quarter and for the year essentially is a great achievement, and I'm very happy with that. Now I hand over for the more detail on other expenses to Jacob.
Yeah. I mean, I think you said it also. It is a bit lumpy, the other operating expenses. It tends to move a little bit. In this quarter, I mean, there's one component in there that's royalties. That moves very much with revenue. When we have more volume, that also drives costs there. Then there's all types of things that kind of some which are indirectly related to the building activity. Freight costs are up, consumable equipment is up. There's a number of items in there that move. As to going forward, I don't see it go, you know, as the company grows, it hasn't gone down that many quarters. You know, we will probably won't see the same increase either each quarter. It is a little lumpy, but over time will increase as we grow the operation.
Okay, thanks very much.
Thank you.
Thank you. Our next question comes from the line of Oscar Rönnkvist of ABG Sundal Collier. Please go ahead, your line is open.
Good morning, Martin and Jacob. Just a few on-
Good morning.
Yeah. The first one, regarding your margin guidance, which is above your Q4 margin, do you expect a slowdown in OpEx growth from previous levels, if we take it in like relative terms? Or is it rather like an increase in top line growth according to your forecast?
It's an increase in top line.
Oh.
Of course, OpEx will follow.
Yeah.
It's primarily driven by an increase in top line.
All right. Relative to previous like year-over-year growth in costs, do you expect the relative percentage term to decrease relative to what it was in the previous years?
If you calculate the incremental margin, it's always been a bit higher. Over time they will assimilate mathematically, if you would put it like that. If that makes sense.
Next one on the recent signing with FanDuel. You signed an exclusive, like, casino deal. Do you expect this trend will continue? And do you also expect the Playtech customers with like equal deals to open up for multiple suppliers?
I think that the over time exclusivity will not be there. Right now it's more of an option where the operators want to have the best product and they need to get a portion, they need to give something. Now we end up in agreements of one or the other kind. Competition is good. There will be competition in U.S. We need to be best. We need to move forward every day, and we need to release the best products every year for the end users. I don't see any change in that.
All right. Understood. Next one, just looking at the growth opportunities in Asia, is it rather like a significant grab of market shares? Or is it like more of a market online trend that will fuel your growth in Asia? And additionally, if you could just, do you have like a ballpark estimate of your current market share in Asia? Or maybe just discuss sort of your projected market position there right now.
I would say that we're still small in Asia. Asia is a huge market, that's the first. I think that what builds the Evolution is preference, trustworthiness in the end users and entertainment of the end user. That is what makes our traction, and that's why Asian or North American or European players play. There's simply many more players in Asia than in Europe because it's a larger population. That's why it's driven. In total market share, very hard to estimate as it's hard to estimate also in Europe since we are the ones that disclose our figures, but it's hard to get the others. Europe, we have a good market share, and in Asia I still think we're small.
All right. Got it. Just a final one on the regulatory allegations here. So I know that you, yeah, are talking like daily, on a daily basis with the New Jersey Division of Gaming Enforcement. Are you worried that the New Jersey Division of Gaming Enforcement or any other regulatory commission could force you to block other markets than the sanctioned ones, or force you to cease operations with certain customers such as, I don't know, stake.com, for example?
We're very comfortable with our business model. We only then, as you all know, sell our content to licensed operators, licensed by a state or a government or a country. We're comfortable with that. We've been operating in U.S. since 2018, have 1,500 employees, and we are not worried about our position in total. Of course, you should never be arrogant. Everything that happens, you need to address, and we want to be better on everything, every day. Now we're of course looking into this, and we find things that we can enhance also in this area. As we stated, as we do that and we find those things and we tune those and we do those things that make it better, it's been an insignificant effect on revenue.
Okay. Thank you. That was all for me.
Thank you very much.
Thanks, Oscar.
Our next question comes from the line of Rikard Engberg of Erik Penser Bank. Please go ahead. Your line is open.
Morning, guys.
Morning.
Morning.
Can you please elaborate a bit on the bet spots development? I know it's a quite high growth quarter-over-quarter. Is that related to higher capacity or is it related to increased activity in the networks?
The bet spots is increased activity. You saw my comments on Crazy Time and it's one of the strongest games. In total, activity in the network has increased.
It's not that it's capacity that is limited during the Q1 to Q2, Q3 during 2021?
No, I wouldn't say so. We are undersupplying. We need more capacity. We could expand. I mean, it's hard to recruit 6,700 people, as I said. We could expand faster, but we are on it. Believe me, we are on it.
Okay, good. Also one question. Yesterday, you talked about in the one-stop shop and integrated bonus systems. Is that a key to achieve a higher growth within the RNG segment?
Good questions. I would say that the bonus and free spin situation in RNG is less important now than 10 years ago because of regulatory aspects and limitations in that. I would assume that development continues. It's still important, but it isn't as important as it was in the past.
Okay, thanks. That was all for me.
You good.
Thank you. Our next question comes from the line of Kiranjot Grewal of Bank of America. Please go ahead. Your line is open. Oh, it seems the question has already been answered. I'll move to the next question. The next question comes from the line of Oscar Rönnkvist of ABG Sundal Collier. Please go ahead. Your line is open.
Thank you, and good morning, guys. Couple of questions from me, especially on the product pipeline here for 2022. Great presentation yesterday. First on the live side, you seem to announce Evolution-branded live casino games yesterday. How many do you plan for the full year? What titles are you most excited about in terms of innovation and revenue potential, Martin? It would be interesting to hear. Thank you.
We will release more games, and there's more to come. I'm very excited overall and for different reasons for some of the games that we release. It's very hard for me to pick. I mean, a new Big Baller MONOPOLY game, fantastic. It's such a beautiful studio. It's such an amazing game. It triggers some part where we are on our way into a new segment. Fantastic game. The XXXtreme Lightning Roulette is an amazing game. It will sort of continue our route with the lightning games and make it take it to the next level. It will be, in my world, a blockbuster. Then if you look at the Gold Bar Roulette, the one that you saw in the first picture, I mean, it's an amazing game.
It's a state game. It's gonna be great. There is a lot of things coming in the live environment, and I very much look forward to it. It, it's more if we did a little bit more Asian flavored games last year, it's also, but with Peek Baccarat, it's also here, but it's more towards North American and European market this year.
Excellent. Thank you. I mean, on the slot side, a huge number of announcements yesterday, including perhaps especially, Superstars. A little bit hard to put into context the quantity of releases and the impact. Do you think the pipeline in itself is vastly superior to that in 2021? Would you consider the OSS rollout as probably more important to get growing in the slot segment?
You put one thing against the other. I would say, yes, the product roadmap, as I stated, 2022 is the best one ever. That's just it. That goes for each part of the roadmap as well. If I'm thrilled about the OSS, it's like a strategic tactic piece. It's the right thing, seamless, flawless, reaching out, single integration, making it easy, seeing to that everything works smooth, moving us toward this Amazon of gaming, where you can get all the content at the one single spot. Having that in connection with a new lobby, it's like phenomenal. Then on top of that, we release the games, and then it's more easy to release games. We are on our way, don't forget that.
Usually companies maybe talk about this for years as a vision. We talk about it, and we have already. We'd say in a couple of weeks, we're 30% out with OSS, but we're not done. There's a long road. The exciting games, new lobby, fantastic OSS.
Understood. Thank you. On North America, growing by 6%-7% sequentially, I believe. I have the market growing at maybe 14%-15% sequentially in U.S., in the iGaming market. It's the lower growth. I think you partly perhaps answered this a little bit, but it's lower growth primarily due to the Ontario licensing process, or are you also seeing sort of a clear impact of not having the full licensing offering in the U.S. yet?
I mean, both. I think, Martin, you answered it almost a little bit earlier on the call. Both of those things affect. I mean, we are expanding as fast as we can in the studios there. Yeah, I think it's fair to say that we're currently a bit underserving the market when it comes to capacity. Yes, I mean, the Ontario affects a little bit in the quarter as well. Yes. Yes, on both your suggestions.
Understood. Just the final question from me. I guess it's for you, Jacob, again. A little bit nitty-gritty here.
Mm-hmm.
Could you shed some light on the organic or constant currency growth of Live Casino here in Q4, given a lot of FX movement and so on? Thank you.
I mean, there's no direct FX effect. All the live revenue is organic. You could say, of course, you know, different operators will have players play in different currencies. You know, we will invoice mainly in euros. There's no direct FX effect to us. Of course, indirectly there might be some, but we don't follow that.
Got it. Thank you very much.
Thank you.
Thank you. We've got Kiranjot Grewal of Bank of America back on the line. Please go ahead. Your line is open.
Hey, morning, guys. Sorry about,
Morning.
Morning.
Morning.
Just a couple of questions from me. You guys said that you have over 1,000 tables that you ended the year with. Could you maybe speak to how they were phased in, whether you sort of rolled out more towards the end of the year? Just trying to see if there's any impact on margins from that. Also, as you roll out some of these non-scalable tables such as blackjack, do you think they could weigh on your margins? Thank you.
We're expanding faster in the end of the year than in the beginning. The last quarter has been very hectic. That's when it comes to the 1,000 tables and above. It's a little bit heavy towards the end of the year. The margin, I mean, we guide now on the 69%-71%, and we're happy with that. That is including the effects of an expansion in the product suite, both when it comes to non-scalable and scalable games. If that makes sense.
All right. Thank you.
Thank you.
Thank you.
Thank you. Once again, if there are any further questions, please dial zero one on your telephone keypads now. Okay. Actually, bear with me just one second. There's come through a late question. Just need to register that.
Were there any more questions? Okay. Were there any additional questions?
Yes.
Yeah, sorry.
Sorry, apologies. The question literally came in just as I was saying there's no further questions, and it was from a late caller, so I just needed to register them. It's from the line of Simon Davies of Deutsche Bank. Please go ahead. Your line is open.
Okay.
Yeah, morning. Just two quick ones from me. Firstly, we're hearing increasing-
Welcome.
We're hearing increasing talk of wage inflation, particularly in the tech space. I was just wondering whether you were seeing any increased pressures in terms of your ability to recruit, particularly in North America. Have you seen any signs of a rise in staff churn rates? My second question, just very quickly, is there any chance you can give some indication in terms of the 1,000 tables that you had at the year-end, how many of those are in North America? Where do you see that number going to?
Also two good questions. I mean, there is a lot of talks about inflation worldwide and of course, depending on the pandemic and the countries print money or stimulate in other ways, we see inflation increase. How that will affect, we don't really see it yet. We haven't had any substantial effects. We don't see sort of a churn increasing because of that. However, of course, recruiting at the pace we are is also costing money when it comes to churn and others. Nothing out of inflation yet. We have to get back to that if that happens, but that's same for, I guess, all of the world and whichever business you have.
When it comes to the split of the tables to the North American, I really understand your question. We don't disclose that. Maybe we'll come to a situation with that later. We are in a heavy expansion and we could say that New Jersey have been there for a while but it's still expanding. I expect it to almost double and the same goes for Pennsylvania and Michigan. Expansion is heavy, but we don't comment on the exact number of tables.
Thanks.
Thank you.
Thank you. That was the final question on the phone for this time, so I'll hand back to our speakers for the closing comments.
Okay. Thank you, everyone. It was a pleasure to have you here today and to present another great quarter as I see it from Evolution. Above all, we have a fantastic product lineup for 2022. Thank you for listening and speak to you again in a couple of months.