Now I will hand the conference over to the speakers, CEO Martin Carlesund and CFO Joakim Andersson. Please go ahead.
Good morning. Welcome, everyone, to the presentation of Evolution's Report for the Q1 2025. My name is Martin Carlesund, and I'm the CEO of Evolution. With me, I have our new CFO, Joakim Andersson. Joakim joined Evolution in February, and it's great to have you here, Joakim. I will start with some comments on our performance in the quarter and then hand over to Joakim for a closer look at our financials. After that, I will conclude with an outlook, and then we'll open up the call for questions. Next slide, please. Let's start with the Financial and Operational Highlights of the Quarter. First, let's focus on the operative side, operations side, as two activities have had a certain impact on the financial result.
The first one, which I highlighted already in the last earnings call, is that we started to add new technical measures that aim to more effectively ring-fence the markets with a local regulation and ensure that our games are only available with locally licensed operators for markets where such license exists. Following the introduction of such ring-fencing measures in the U.K., we have moved forward with other European markets in the quarter. This is a proactive measure. It's a move from our side in markets with high channelization that the ring-fencing has had limited impact. However, in markets with low channelization, we have seen a drop in revenue. As you know, we believe that regulation is positive over time, and we support the regulators in the ways we can.
However, as a supplier, our impact is actually quite small, as channelization is highly dependent on the regulatory framework and the parameters used, such as tax rates, proactive measures. If it is too expansive or too complicated to play, the players will disappear. That is the reality, and for regulators, it's about finding the right balance to keep the channelization on a high level and to protect the most vulnerable players. The second activity with an impact of the result is the continued work to stop the criminal cyber activity that we face in Asia. We are making constant progress, but the measures do impact the network in general, and the revenue is in line with what we have seen in the last couple of quarters.
Despite the ring-fencing effects and the cyber challenges, I'm positive about 2025 as a whole, with a very strong product roadmap that we only just have started to execute on, together with a solid underlying demand. Both online and live casinos are at early stages on the global level, and we will continue to expand to meet demand. In the Q1, we have opened a new studio in Romania, which partly makes up for the capacity that we've lost in Georgia. Later this year, we will open a new state-of-the-art studio in Brazil and in the Philippines, as well as a second studio in Michigan, while also expanding at full speed in Malta, Colombia, Argentina, New Jersey, and Philadelphia, to name a few. I believe that this is a testament to our stance that we will always prioritize growth and to take market shares over margin.
Even though we had various challenges in the quarter, we do not compromise with our long-term beliefs and priorities. In Georgia, the situation for Evolution continues to be stable, and we operate without disruptions. Our decision to not increase capacity remains as before, as we want to achieve a better balance with less dependencies on a single studio. While we are speaking about Georgia, I would also like to highlight that we have engaged a highly reputable accounting firm, one of the large four, to conduct a full independent investigation of our operations. They have had complete access to the Georgian studio and have reviewed several hundreds of documents and material. The conclusions are not a surprise to us. Salary levels are well above comparable roles. Any issues with the work environment have been dealt with years ago and in direct connection with when they occurred.
Any violations of our Code of Conduct has been handled as they should, and strike participation levels have not even been close to what was reported in the media. I could go on about this for a long time, but we'll leave it there. For Evolution, the strike is a past chapter, and we will continue to provide a great workplace for our employees in Georgia and elsewhere. Let's say a few words on the actual financials. Net revenue came in at EUR 520.9 million, corresponding to year-on-year growth of 3.9%. EBITDA decreased 1.1% compared to last year, and the EBITDA margin comes in at 65.6%, which is somewhat below our estimated full-year guidance of 66%-68%. As a reminder, we foresaw a softer margin in 2025 compared to 2024 due to both the ring-fencing in regulated markets and the cyber attack countermeasures in Asia.
We do, however, believe that the second half of the year will be stronger than the first half, and we keep our full-year guidance as before. Our Live segment was impacted by the European and Asian developments, with the revenue coming in at EUR 448.7 million, corresponding to a growth of 4%. We continue to see good momentum in North America and also believe that activity in LATAM will pick up, supported by the new regulation in Brazil. RNG revenues totaled EUR 72.3 million, growing year-on-year by 3.1%, a development that was softer than in the Q4. I believe we can grow more, and our Nol imit City brand is a testament to that, as they have several successful game launches in the quarter.
To conclude this slide, I'm, of course, not happy with our current growth, but the measures behind it are important for our overall work to increase the gap to competition. We face challenges that we meet. Any issues we see, we fix so that we become even better every day. We have an exceptional position to do so, with the best product in the world in a structurally growing market, combined with a scalable model, a strong balance sheet, and a team of more than 22,000 employees to realize the potential. Next slide, please. Moving on to the operational KPIs, which are the headcount numbers and the Game Rounds Index. Looking at the headcount, we have kept the pace in recruitment in the quarter, and for the first time ever, we've surpassed 22,000 employees, corresponding to an 8.4% year-on-year growth.
In order to meet demand for our services, we need to increase our footprint and expand our teams on a global level. I'm very proud of the workplace we offer and our dedication to offering career opportunities at all our sites. We're currently doing a major recruitment push in Brazil and in the Philippines ahead of the opening of our new studios there. The Game Round Index can be seen as a general indicator of activity throughout our network over time. For an individual quarter, it does not always correlate with the revenue development, which is evident this time. The increase of 10.9% in the quarter is most related to the progress of our game shows that are huge, that are hugely popular. Next slide, please.
Now we are on the most exciting slide and the foundation of our business, the offer to offer the best and most innovative games in the world. We refer to 2024 and 2025 as our product leap years, and this year, we will in total release more than 110 games across our portfolio. At the ICE exhibition in Barcelona in January, we showcased many of the headline games, and the response from operators was truly great. We are now in a launch mode, and among the releases in the Q1 are War, our version of Casino War game, with an engaging setting and simple rules, and Race Track, which is a great example of how RNG games can be elevated using a live host. We also released Bet Stacker Blackjack, which is an exciting take on the classic game.
In the beginning of April, we launched one of the most anticipated games of the year, Marble Race. It's as simple as it is exciting. Players bet on which marble ball will win the race or the top two winning combination. It's a fast-paced, super easy-to-take part in, or actually just to watch. Reception has been great. Among the upcoming releases, we have Super Color Game, which is just a few weeks away. Three big dice, quick rounds with single, double, and triple betting options with a multiplier of 1,000. This will be a hit. During the summer, we have what I believe is the most anticipated game of them all, Ice Fishing, a speed game show with a money wheel unlike anything else. The live host will catch for multipliers fish in icy water. It's truly something different. It's spectacular.
On the RNG side, we have launched 17 new games in the quarter, and another 19 are set for release in the second one. The titles from No Limit City are doing exceptionally, and we have currently released some of the best slots on the market. One of the games that I would like to highlight is Duck Hunters, which was released in February, and that has been off to a tremendous start. You would have to go back a very long time to find something similar in terms of performance. All in all, there is a lot happening right now, and I am very excited about both the latest and upcoming releases. We continue to push the limits and provide the most thrilling player experiences, further widening the gap to competition and creating value for all our stakeholders. Next slide, please.
Moving on to the geographic breakdown with the revenue performance across our regions. What stands out in the quarter is the development in Europe, which was more or less flat compared to the Q1 in 2024 and down by 6% from the Q4. We can clearly see the effect from the ring-fencing in these numbers. What is important to remember is that the underlying demand remains strong and that we through the ring-fencing measures have created an even stronger foundation that we can grow from. Asia remained on a stable level compared to last quarters, with a revenue of EUR 201.9 million and growth of 2.2% compared to the Q1 of 2024. As for Europe, underlying demand is strong, and we see great potential as soon as we have come to terms with the ongoing issues with the cybercriminality.
North America continues its strong performance with year-on-year growth of 15%. Live games are still at early stages in the region, and we find new audiences every day. In February, we expanded our partnership with bet365 in New Jersey, adding to its live dealer offering already available in Pennsylvania. LATAM exhibited 9.7% growth year-on-year, but declined slightly compared to the Q4. We highlighted already in the last report that Brazil's new regulation had experienced some initial teething problems, which have had an effect on the performance. It is not unusual that it takes some time for us to settle in with the new regulation, but we see activity picking up. Other regions mainly consist of Africa and continue to show good year-on-year growth.
A development worth noticing is the jump in revenues from regulated markets, now with a 45% share of total net revenues, which is mostly connected to the Brazil regulation. With that, I will hand over to Joakim for a closer look at our financials. Next slide, please.
Thank you, Martin, and good morning to all of you on this call. I'm very happy to be on board and hope to see you all in person at some point in time. I will now present the financial performance in some greater detail, starting on this page, page six, with our financial development over time. As you can see on this page, we are on a long-term growth trajectory, but as shown in the report this morning and as presented by Martin earlier, we currently have some headwind. Net revenue in the Q1 was EUR 520.9 million, corresponding to a growth of 3.9% compared to the Q1 last year. On a constant currency basis, we estimate the growth to 6.1%, as we saw continued negative effects from changes in the currency rates.
Our reported EBITDA was EUR 342 million in the quarter, meaning that our margin was 65.6%, which is at the bottom end of our full-year forecast of 66%-68%. Let's go to the next slide. Here we will take a closer look at the profit and loss statement. Let's start with the breakup of our revenue. We are this quarter as a consequence of the earlier mentioned issues showing a relatively low growth both in live and RNG, with a growth of 4% in live and 3.1% in RNG year-on-year. You all know that we expect more from both categories, and we are working hard, as Martin mentioned, on solving these issues. Our total operating expenses in the Q1 amounted to EUR 217.5 million, which is 15% higher than the same period last year.
This is a result of our increased investments into new products and new capacity, which in turn will give us continued growth in the future. Our personnel expenses amounted to EUR 119.9 million, which is an increase of 12%, driven by the net addition of 1,686 employees year-on-year. The other operating expenses amounted to EUR 59 million, which corresponds to a 21% increase. Within this number, we, for instance, see a higher level of legal cost, as we, as a large global business, more frequently are engaging in complicated projects where external legal advice is necessary. This cost line will, over time, as for the other cost lines, scale and grow slower than our revenue.
It's also worthwhile reminding that compared to last year, we are now running our studios with a less favorable, more costly resource mix as a consequence of the measures we took last year in connection with the striking Yogya. This partial move of operations out of Georgia is having a negative impact when comparing the cost base and profitability year-on-year. As part of our ordinary course of business, we are obviously monitoring the news flow related to the potential changes to global tariffs. At this point in time and from what we know today, we do not expect any material impact on our results. The financial items were negative EUR 1.3 million this quarter, primarily driven by revaluation of bank balances.
Next, tax was EUR 47.5 million in the quarter, with a tax rate of 15.7%. All in all, we had a profit for the period of EUR 254.7 million. With 205.6 million shares outstanding, we get to earnings per share EPS of EUR 1.24, which is almost in line with the EUR 1.25 we had for the same period a year ago. Let's move on to the next slide. Now on page eight, where we have an overview of our operating cash flow and capital expenditures. Let's start by looking at the graph to the right, which shows the development of our CapEx. Total CapEx in the period amounted to EUR 33.6 million and was split almost evenly between intangible and tangible assets. The investments into intangible assets were EUR 16.6 million and were mainly spent on development of new games and technical improvements to the platform.
The tangible investments were EUR 17 million, mainly spent on studio space, gaming tables, servers, and other technical equipment. In the graph, you can also see how our investment pace relates to the last four quarters' revenue for each of the periods. As communicated last quarter, we expect the full-year CapEx to amount to around EUR 140 million. If we then take a look at the graph to the left, we can see the development of our cash flow and our cash conversion. The operating cash flow after investments amounted to EUR 327.7 million in the quarter, with a very strong cash conversion of 87%. It's a good improvement both year-on-year as well as quarter-on-quarter, with a good contribution this quarter from a reduction of the accounts receivables. Finally, for me, some brief comments on our financial position on the next page.
On this page, you will, as usual, find a summary of the balance sheet for the Q1 compared to what it looked like at the end of last quarter. As you can see, our strong financial position remains. We have our bond portfolio of EUR 101.6 million and a cash balance of EUR 969.2 million. Our total equity amounts to almost EUR 4.2 billion. There are no material changes during the quarter. We have our annual general meeting on the 9th of May, and if the shareholders vote in favor of the Board's recommendation, we will, which is in line with our capital allocation framework, pay a cash dividend of EUR 2.8 per share, which means that the total amount of EUR 572 million will be paid to our shareholders.
During the Q1, we used our mandate to repurchase approximately 2.1 million owned shares in the market for a total amount of EUR 154.1 million. As communicated last quarter, the board has decided to repurchase shares for EUR 500 million during the year, and we will start the next program of the repurchases within short. With that, I will hand it back to Martin for his closing remarks.
Thank you, Joakim. Let's summarize the presentation and then move to the Q&A session. Financially, we've been off to a slow start this year due to the ongoing continued issues in Asia and the self-imposed proactive strict ring-fencing of regulated markets in Europe. As a consequence, and in combination with ongoing investments into expansion, our profitability in Q1 comes out on the low end of our estimated full-year range. This is, of course, not good, even though we always have quarterly variations. The revenue growth has simply been slower than what we have capacity for. However, am I unhappy with the overall development in the quarter? Definitely not, because everything that we have done supports the mission to increase the gap to competition. 2025 will be yet another great year for Evolution. That is the bottom line.
We are more paranoid than ever and working with an incredibly strong product roadmap and continued studio expansion. We see strong underlying demand. Both the studios in the Philippines and Brazil will be state-of-the-art, using all expertise and experience that we have built during our soon 20-year history. On the game side, as said before, we will deliver experiences that players have never seen before. As Joakim mentioned, next week, we will hold our annual general meeting that, among other things, will resolve on the board's dividend proposal. We remain committed to deliver strong shareholder returns under our capital allocation framework. As a last remark, as you know, we always aim to make Evolution a bit better every day, and we have no time to waste.
We are already entering May, which practically means that Christmas is around the corner. It's full speed ahead for all our teams, and I look forward to what the rest of the year will bring. With that, as an end remark, we move to questions.
To ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. Question comes from Oscar Rönnkvist from ABG Sundal Collier. Please go ahead.
Hey, Oscar.
Thank you. Good morning. Good morning, Martin. Good morning, Joakim. Thanks for taking my question. My first question would just be on the ring-fencing in Europe. You said it started in February, and it obviously had quite a big impact on the numbers in Europe. Could you say anything on sort of when that started in February? Was it like one-month contribution, or was it two-month contribution in Q1?
It's a good estimate to count on two-month contribution in the Q1.
Perfect. Thank you. I know it's very difficult even for you, but you obviously had two percentage points FX headwinds, and it appears like two to three percentage points headwind from European ring-fencing in Q1. Is it in any way possible to sort of quantify the cyber attacks impact so we can get a little bit better sense of the underlying growth in the quarter?
It's very hard to quantify the Asian growth. W e have now three quarters in a row where we are essentially flat. If you go back three quarters before that or even a little bit longer, you will see that we quarter on quarter had a much better growth. Of course, we might not see that we, even if we turn this around in a couple of quarters, come back to that level, but of course, we should have a quarter on quarter growth.
All right. Perfect. Just again on the cyber attacks. You have gotten that from, I thin y ou started mentioning that in Q3 last year. This is now the third quarter that you mentioned it. Can you talk a little bit about how the development has been going? H ave you seen more pressures than you initially did after you started that with just thinking on the revenue side, if you limit the access to some aggregators possibly and so on? Is the headwind becoming bigger initially when you stop the distribution to some aggregators and we'll see that picking up in the next few quarters, or has it been quite stable over the last couple of quarters?
We have good traction on the actions we take. The actions we take in Asia is, of course, then partially shutting down and partially growing. The sum of that right now is coming out as flat. We're in that process. We're doing the right thing. The actions that we take will eventually move to a greater increase than what we take away.
Perfect. I guess there's no additional comments on any timing when we could expect the quarter-over-quarter growth to pick up? I don't have any more insight on that right now. No.
Got it. Perfect. That was all for me. Thank you.
Thank you very much.
The next question comes from Raymond Ke from Nordea. Please go ahead.
Hi, good morning. A couple of questions for me as well. Starting on Europe and the sales there impacted by your ring-fencing actions. Could you provide some color on whether the growth pace of the countries with high channelization in more recent quarters has been higher or lower than the countries with sort of lower channelization just to understand the underlying growth pace of Europe?
I won't comment on the growth in particular countries. In general, we have seen a blended rate of 9%, and I wouldn't say that any of the countries stick out in any extreme way. It gives you some kind of color, I hope.
Yep. That was helpful. I noticed on LATAM, sales fell sequentially here in Q1. Trying to understand, was this in line with your expectation, and could you maybe share what you think is behind this development?
Yeah, I can give you a little bit more color. It's as simple as Latin America, except Brazil, is doing very well. We're growing very nicely there. We have Brazil, which is the regulation just came into force, and that has made that market decline and grow from a lower level.
That's, I would say, have taken a little bit slower start than expected, but we have not changed any of our outlook. It looks very promising, and there's 230 million people living in Brazil, so the future looks good.
Great. Just another question also on Asia and the technical actions you implemented there. You talked about shutting down and also growing in some parts and yielding a flat top-line result. Could you maybe elaborate a bit more on any technical actions that you've implemented, or is it just about essentially shutting down in certain parts?
We work both technically as well as commercially, of course, with the customers that we have there, and we often relate to the technical implementations. We are simply solidifying our protection against theft in our and detecting of theft. And then when we do that, we shut down parts of it, and the other parts continue to grow.
Okay. Perfect. Very clear. All for me. I'll get back in line. Thank you.
Thank you very much.
Thank you.
The next question comes from Georg Attling from Pareto Securities. Please go ahead.
Good morning, Martin. Good morning. Joakim. A couple of questions from me starting also with Europe. I'm trying to understand if the ring-fencing that you've done, have you done that all at once, or will we see ring-fencing in more markets in, let's say, Q2?
There won't be more markets. We were sort of done what we're supposed to do or proactively did, and it all more or less happened in the beginning of February. As I said before, two months out of three.
Okay. A new base from early February, I guess you can read that.
Correct.
Second question on LATAM, you mentioned Brazil here, and I know that the start was quite weak, but could you comment on the trend throughout the quarter as that growth pace in Brazil picked up towards the end of Q1?
We see activity increasing, and I want to leave it with that, not to make sort of quarter-on-quarter projections.
Okay. Just final question on Asia. You say you shut down some of your aggregators or distribution partners here. Could you comment on the growth excluding the aggregators that you shut down?
It's a combined measure. There is a lot of things going on, and I don't want to go into details. It will only lead us in the wrong direction. We are, in combination, getting good traction on what we are doing, but essentially, we are still flat in revenue, and we hope to change that, of course.
Okay. That's all I had. Thanks.
Thank you very much.
Thanks.
For the next speakers, please introduce yourself with the name and company. Thank you. Please go ahead.
Hi. I'm Pravin Gondal from Barclays. Morning, Martin.
Good morning.
Thanks for taking my questions. Firstly, on Europe, the growth was notably softer in Europe, but B2C operators reporting that we have seen so far, and then the regulators' data in Italy suggests that in the large markets like U.K. and Italy, the growth was positive and robust. Can you share some more colors on weaker spots in Europe? I know you won't be talking about specific countries here, but sort of what are the areas where you think you can improve the performance in coming quarters? W hen can we expect to see Europe returning to positive growth? W hen can we expect this ring-fencing to be lapped up and then behind us?
The proactive measure that we are taking now is to see that we are creating a really good fundamental and a little bit ahead of that. I have been meeting all the regulators all over the last period, and we're working with them. We don't comment on specific countries, just as you stated, but I gave you an idea that where the channelization, of course, was low, the impact of ring-fencing is high. And where the channelization is high, the impact is low. Essentially, the countries that have a very stringent regulation and where they lost a lot of players to unlicensed operators, there we have a larger impact. That gives you a little bit of the flavor.
As you understand, we have taken measures in, of course, in the U.K. a little bit earlier, but for the rest in the beginning of February. Coming out into Q2, we have this now, the new fundament, the new level. From that, of course, we expect to be able to have a good development.
Thanks. That's helpful. Quickly on the current trading, can you please share some color on Q2 trading so far? How should we be thinking about the top-line growth trajectory for the remainder of the year?
I'm sorry, but we do not guide on quarters. I stated that I expect the second half to be a little bit stronger as a result of the full effect of the ring-fencing in Q2. That is what we state when it comes to a little bit favoriting guiding.
Thank you very much. That is really helpful.
Thank you.
Please introduce yourself with name and company. Please go ahead.
Hi guys. This is Martin Arnell with DNB Stockholm. Can you hear me?
I can hear you very well. Thank you. Good morning.
Yeah. Great. I want to ask you on the U.K. Gaming Commission review. When do you expect more clarity on that? Are you in constant dialogue with them? Do you know anything about the outcome? Have you taken all the necessary actions, or is there more to be done?
We have taken all actions that they asked us for. We have provided all the information. It's a process, of course, driven like any regulatory process by their agenda and their timeline. We have a good cooperation and talk a lot to them, and I expect we're moving forward. Exactly when it's closing, I can't state that because it's not simply up to me.
Do you know anything on the outcome so far?
No, I do not. I don't want to speculate.
Okay. Can you just help us understand a bit more on the ring-fencing? H ow temporary of an effect is it? Because a regulated operator that offers your games should just be a click away, right, if the player's out for your games. Why is this a negative effect at all in a medium-term perspective?
That's a very good question. Let me elaborate slightly on that, not to be too lengthy. We are a supplier, technical supplier of games. We are not really affecting the channelization in the country. The channelization in the country is dependent on the parameters that the regulators set up. If you put a high tax, 35%, 38% tax, or if you put limitations to what the players can do or deposit rules or other things that actually is an obstruction for the player and against the player's will, then the channelization will go down equal to any other regulation or whatever that might be. If you push the market too hard, the market will find its way to its products in another way.
The regulators, when they push it like they have done, and the channelization goes down, it's because the players are not comfortable playing on the regulated sides. The regulators, in some cases, now move to repressive measurements. They want to restrict it even further. They want to invest money in the customs, in the parts supporting. That's where we are now. The players, they need to want to play on the regulated sides. We can't do much about that. That's why, even though it's a click away, it's a bit slow to get back to the licensed side.
Okay. Thanks for clarifying that. In your actions from February, how much is this a proactive action from yourself, or how much is it that other regulators have picked up the situation in the U.K. and actually asking you for changes?
I personally met almost all major regulators in Europe during this period, and it's a close to 100% proactive measure. That is what it is. We want to see to that we are not, that we stand firm and avoid similar situations. And don't forget that we've been regulated for soon 20 years, and we have been acting in the same way and been lenient and following through, but the regulators now are moving a little bit. Now we're trying to be a little bit ahead of that. It is a proactive measure.
Perfect. My final question. You repeated a bit our guidance, and how do you reason behind that? Because, w ouldn't it have been more prudent to take a little bit more cautious approach given that you're in the early phase of the changes in Europe? Thank you.
When you make a guidance, you need to make it the best estimate you have for what the year will give or what the EBITDA margin will give. You need to have a good reason for if you're going to lower it or increase it. Right now, this is the best way that we see it. This is our guidance. We think that we will reach between 66-68% 2025. We shouldn't change it. All right.
Thank you, guys. That's all for me.
Please introduce yourself with the name and company. Please go ahead.
Hi. Good morning, everybody. It's Monique Pollard here from Citi. I had three questions, if I can. The first one, Martin, just coming back to this idea of the geo-blocking that you've been doing in Europe, I'm trying to understand how much of the impact is straight blocking of unregulated operators in the region, but whether there's a subsequent impact, which is on those unregulated sites, for instance, maybe your games were being played at faster spin speeds with no deposit limits, and that has all been removed because now you're just on the regulated sites, and therefore, the games are being played in line with the regulation. As in, in the regulated markets you were in, where you were offering the games to unregulated players, did they still have the sort of parameters of the regulatory backdrop attached to them or not? That's the first question.
The second question is just on the RNG momentum. That slowed materially to 3% this quarter versus 7% last quarter. I just wanted to understand what you think you can be doing to get that portfolio performing better. Is it a matter of releasing more games? I don't know. Or is it something else that you feel you've got a handle on now? The final question is just a clarification. I'm just trying to make sure there's no material changes, for instance, in commission rates in any part of your business in this quarter. All the slowdown that we're seeing is to do with either the one-offs, the cyber attacks, the geo-blocking, or it's to do with the slowdown in player volumes. There's no change in commission rates.
Okay. Yes. First question is an intelligent question. I understand what you're asking. I wouldn't say that it's because that the games are slower and that they don't want to play. The players, when they are ring-fenced, they don't return because they don't return if they can continue play on other providers outside the license. There is a bit of stiffness. I wouldn't assume it has to do with the way that the games are played inside the regulated markets. That's the answer to the first question. That's not material, as I see it. When it comes to the RNG developments, I would say that that is also as much affected by the ring-fencing. We don't quantify exactly where the growth is coming from, but it's also affected by that.
That is part of the softness. Quarter on quarter, Q4 is also seasonality strong, and Q1 is not so much. That's also part of the effect. The third effect on the RNG is that we are still working our way to get to a good level in North America. T hat the underlying part of RNG is actually stronger in Q1 than it was in Q4 and in Q3, but the growth comes out at 3.1%. That is what it is. Pricing, no. I do not see any structural changes in the pricing or the player mix or in other, there is no such fundament.
Thank you. Just sorry, coming back to the first question. As it was before, pre the geo-blocking, where you were offering your games on an unregulated site, they did not have the regulatory changes attached to them. You could play at whatever spin speed, etc., but you are just saying that does not have a big impact.
I don't say that an overregulated market or a too stringent market will get low channelization. I don't see that that is a light switch happening that shows in Q1 that that is the effect that the players are playing, but they're playing on lower speed or other. That's not it. In terms of the ring-fencing, we are stricter. That means that now anyone playing on our products have to have a license where such license exists.
Got it. Okay. Thank you.
Thank you.
Please introduce yourself with the name and company. Please go ahead.
Hello. Hi. This is Rendra here from AlphaValue.
Sorry, I couldn't hear you.
Hi. Can you hear me now?
Yes.
Okay. Rendra from AlphaValue. I have three questions. The first is particularly regarding Asia. How far along are you with respect to the actions you wanted to take in Asia to fix these cyber fraud issues that you've been having for the past couple of quarters? Any success so far you are noticing as a result of these actions that you would have taken probably a couple of quarters ago?
We are having good traction with the actions that we are taking. The actions are still leveling out. We are, as I stated, removing the number of customers and the number of traffic. At the same time, of course, we're growing, and that equals out. I don't have any exact timeline to relate that to. We are on track with what we are doing, and we hope to see, of course, as we move forward, traction revenue-wise as well.
Okay. Perfect. Second one was, do you expect any more of these proactive actions that you've been taking in other markets in Europe? At least, is that on the horizon, or do you see it at the moment?
No, I don't expect that. We are now following the regulation, and the regulation is moving in Europe. Now we come to this baseline. Of course, we need to be lenient and follow through also in the future. Right now, I don't expect any other actions.
Okay. Just one on your comment regarding the business growth. You said that there was a lot more growth in the Live Casino side was driven by more commissions per customer rather than new customers. Does that in any way imply that your win margins have gone up, or are you just seeing more business with existing customers?
I'm not 100% sure I understood what you meant. But essentially, we are working with the majority of the market already since a number of years. So the growth will come from that the large customers get larger rather than from small new customers are added.
Okay. Yeah. My question was, is that win margins going up, or is that just more business with the existing customers?
I think that we have been in that situation over time. I don't think that that is the driving point of the margin in itself. There are a lot of other aspects that drive the margin, such as the resource mix or other things, more than exactly which customer that have what GGR.
Okay. Perfect. And just one last one. Sorry for one too many. The question is regarding your EBITDA margin guidance. What would take you to the higher end versus the lower end in your assumptions or expectations that you kind of modeled?
If we get good traction and do what we think that we can do, of course, we will reach the higher end. A little bit more caution on the lower end.
Okay. Got it. Thank you. Thank you.
Thank you. Thank you.
Please introduce yourself with the name and company. Please go ahead.
Hello. It's Ed Young from Morgan Stanley. Can you hear me?
Oh, yes. Good morning.
Good morning.
Good morning. I've got three questions, please. The first is on ring-fencing. You've talked in detail this morning about the ring-fencing and the timeline, but you've also talked about this being regulated markets in Europe. Could you just clarify for us if there are any regulated markets in Europe you've not chosen to ring-fence? More broadly, why would not this be applied to all regulated markets, including outside of Europe? I just want to understand the framework you have used for the decision you have made around the ring-fencing. The second is FX. You have helpfully given a sort of ex-FX number in the statement. I just wondered if you could help us. Is that just on the basis of the translation of where you have earned commission revenue in dollars or whatever it might be?
Is this also applying a player purchasing power effect, which you have sometimes referred to in the past? If you could perhaps just clarify on that and any thoughts on purchasing power. Then the third, Joakim, obviously newly in the role, I just wondered if you could talk through whether there's anything you think needs to be done differently from how it's been done in the past from your seat as CFO in your role, and if you could expand a little bit on what you think you bring as a new face to the Evolution management team. Thank you.
Y eah. Okay. We work with the ones where there is a local license, and then we apply ring-fencing where those ones exist. That is the remit. We have implemented it in practically all where that exists. That is where we are. When it comes to the second question, what was that, Ed?
Purchasing power. Purchasing power and FX.
The FX effect that we are, that is the bookkeeping currency effect. The purchasing power, we do not quantify that in any way. Of course, the purchasing power effects, and it will always be there. We have not quantified that in any way. That is the bookkeeping part of it that you see. The last one was to Joakim regarding his entry of a new role. Welcome, Joakim.
Thank you very much. Thank you for the question ,=. I have been on board for a couple of months, so I am still new here. I am learning. I get a lot of impressions, a lot of information to digest. T o try to still say something about my first impressions, I t is a fantastic company. I am super eager to learn more. Done great in the past, and we have a lot of interesting things on the table. The team is good. I am quite impressed with the background. We have solid processes. It is high quality of the outputs. I have a great boss. Yeah, that's probably the first impressions.
What can I bring? T his is not a revolution in Evolution, but Evolution, Jacob, who was my predecessor, great guy and knew a lot. I'm trying to fill his shoes to start with. Obviously, I have a slightly different background. I have quite long experience from public companies. As a person, I'm structured and process-oriented. W e can improve everything a little bit. I'm working my way into it, trying to change some things, trying to improve a little bit every day. Nothing revolutionizing for me.
Thank you. I wonder if I could follow up on the first question. You said practically, so maybe there are one or two you haven't. Could I ask again, what's the framework you've decided whether to do it or not? Can I repeat the global question?
I do not follow you.
Why would not the approach be applied globally? Okay. Thanks.
I will not go into detail, country by country, what actions we take. In general, whether it is a local license, we have ring-fenced in Europe. All worlds are different. If you look at, for example, the United States, we are not obliged to ring-fence at all because that is the operator's obligation. We help the operators, but that falls on land. The regulators have a little bit different approach in different jurisdictions. Right now, the European community is moving a little bit towards the B2Bs to be ring-fencing or even being the customs of the borders. We are trying to be a little bit proactive there following suit. That is the situation in Europe. It is different from other jurisdictions. All jurisdictions are different, of course.
Okay. Useful. Thank you.
Thank you.
No more questions at this time. I hand the conference back to the speakers for any closing comments.
Thank you very much for listening. Pleasure to talk to you, answer your questions. Look forward to the next quarter, and some of you I will meet soon. Have a nice day. Thank you.