Evolution CEO Assesses Impact of Georgia Strike on Q3 Earnings Call

^{A security force stands between strikers at Evolution Georgia studios in Tbilisi and the building's entrance. CEO Martin Carlesund (inset) says the situation has stabilized, even though negotitations have gone nowhere for months. (Image: Facebook / LABOR Georgia)}

The ongoing strike at Evolution Gaming’s live-dealer studios in Tbilisi, Georgia, dented the company’s performance in Q3, but CEO Martin Carlesund says operations have stabilized, and the company is moving forward with global expansion plans.

“We have had challenges due to the situation in Georgia,” Carlesund noted on the company’s quarterly earnings call in October. “The disruption has been negative and caused negative effects in the quarter.”

But he said Evolution managed to limit the impact on customers by shifting operations to studios in other countries. Carlesund noted the company’s global footprint—with 20 studios across the world—helped absorb the disruption.

Strong Financials Overall

This earnings call was the first financial report issued since workers at Evolution’s live-dealer casino studios in Tbilisi walked off the job in July, demanding better wages and working conditions. 

Despite the strike-related disruptions, Evolution reported robust numbers for Q3 2024. The company posted operating revenues of €579 million in Q3, for a 27.9% year-on-year increase. 

Profit margins saw a dip that CFO Jacob Kaplan attributed in part to the reduced capacity in Georgia. Adjusted EBITDA for Q3 was at 68.5%, slightly below company projections of 69-71%.

Evolution Georgia Operating at 60% Capacity

Evolution is the worldwide leader in live-dealer online casino games, and Georgia is home to the Swedish company’s largest workforce of online dealers, croupiers, shufflers and other “game presenters” – even after the company responded to strikers by eliminating 1,000 staff positions. 

Carlesund said that as a direct result of the ongoing strike, “we are currently operating at about 60% of full capacity at our studios in Georgia. 

He added that “[This] is a level we will try to maintain” with no plans for returning to full capacity any time soon “due to the instability.”

He did note, however, that Evolution is again hiring in Georgia to maintain its current staffing levels. 

Defending Evolution

On the call, Carlesund addressed criticisms and defended the Swedish company’s operations in Georgia, which have come under international scrutiny as the ongoing strike, now in its fourth month, has reached a stalemate. 

“Evolution fully supports the right of individuals to participate in unions and other organizations,” Carlesund said. “But the union’s demands simply were unreasonable.”

He also claimed that strikers had begun breaking the law with their protests, which is counter to allegations from the unions that contend Evolution security forces are responsible for protests that turned violent. 

One area of dispute has involved the numbers of Evolution Georgia workers on strike. While reportedly thousands walked off the job in July, most of those employees have since returned to work. 

The unions now claim about 800 to 900 workers are actively on strike. But Carlesund said the number was significantly less. 

“On average, over the period, there has been around 550 participants, and currently it’s only about 300 participants, out of 7,500 to 8,000 employees,” he said, "and nothing else.” 

He said because of these relatively small numbers, “our daily operations were not impacted by the strike.” 

However, that changed on Aug. 1,he said,  when “a small number of union activists with non-employees started to illegally block the entrance to the workplace, vandalize our buildings, behave violently, and harass and threaten our working staff.“

“These actions caused severe disruption to our operations,” Carlesund said, “forcing us to move parts of the operations to other studios. This is for me a very sad outcome.”

Despite these setbacks, Carlesund expressed confidence in the company’s ability to grow, and commitment to new markets and technological innovations. 

“We are proud of the workplace we have created in Georgia, and we remain focused on building and expanding our operations worldwide,” Carlesund said.

He highlighted recently opened studios in Colombia and the Czech Republic, and noted the company has additional plans to open studios in Brazil and the Philippines in coming months.

“Our goal is to offer opportunities aligned with European values, giving thousands of young [workers] a solid start to their professional careers.”

He said complaints about working conditions in Georgia were unfounded. 

"We have built a great work environment, with competitive salaries and benefits in Georgia,” Carlesund said. "We are proud of what we’ve created, and we remain optimistic about the future."