Evolution Financials Dip in Q3, Asia Weakness Squeezes Margins
Evolution AB reported a drop in key financial figures for the third quarter of () compared to the same period last year. This performance was largely due to operational challenges and instability across the Asia region.
Net revenues fell by 2.4% year-over-year (YoY) to €507.1 million. Adjusted EBITDA dropped 5.3% to €336.9 million, and profit for the period fell 23.2% to €252.3 million. Profitability was high in Q3 2024 due to a large non-recurring gain related to an earn-out liability reduction.
Margins Hold Target Range as Revenue Shifts
The Adjusted EBITDA margin was 66.4%. This result lands within Evolution’s full-year target range of 66% to 68%. While total revenue decreased 2.4%, the company noted that revenue growth, when adjusted for currency exchange rates, was 3.9%.
Operating expenses grew 5.3% YoY but dropped 3.4% quarter-over-quarter (QoQ). This cost optimization effort was put in place to align the cost base with slower revenue growth.
| Financial Metric | Q3 2025 (€ million) | Q3 2024 (€ million) | YoY Change |
| Net revenues | 507.1 | 519.4 | ↓ 2.4% |
| Adjusted EBITDA | 336.9 | 355.6 | ↓ 5.3% |
| Adjusted EBITDA Margin | 66.4% | 68.5% | ↓ 2.1 p.p. |
| Profit for the period | 252.3 | 328.6 | ↓ 23.2% |
Asia and Live Casino See Contraction
Revenue from the Asia region fell 6.5% YoY and 9.6% QoQ to €189.1 million. The company pointed to ongoing issues with cybercrime and regulatory instability in markets like the Philippines and India as key factors for the group’s overall slowdown.
In contrast, North America revenues grew 14.5% YoY to €74.2 million, though QoQ growth was minimal at 0.3%. Latin America (LatAm) also showed steady growth, increasing 6.4% YoY to €39.8 million.
Regarding game type, Live Casino revenues saw a 3.4% decline to €431.7 million. For the first time, RNG (slot games) revenues outpaced Live Casino growth, rising 4.1% to €75.5 million.
Revenues from regulated markets made up 46% of total Q3 2025 revenues, up from 39% in Q3 2024.
Nine-Month Results Show Modest Growth Amid Cost Increases
For the first nine months of 2025 (9M 2025), net revenues grew 1.5% to €1,552.3 million. However, Adjusted EBITDA for the nine-month period fell 2.2% to €1,024.1 million. Operating expenses rose 10.0% to €645.9 million, driven mainly by higher personnel costs from launching new tables and studios.
CEO Martin Carlesund acknowledged the company is “not satisfied with the growth this year,” citing the persistent issues in Asia.
| Financial Metric | 9M 2025 (€ million) | 9M 2024 (€ million) | YoY Change |
| Net revenues | 1,552.3 | 1,529.2 | ↑ 1.5% |
| Adjusted EBITDA | 1,024.1 | 1,047.2 | ↓ 2.2% |
| Adjusted EBITDA Margin | 66.0% | 68.5% | ↓ 2.5 p.p. |
| Operating expenses | 645.9 | 587.0 | ↑ 10.0% |
Cash flow from operating activities was €371.9 million in Q3 2025. The company spent €29.8 million on capital expenditures (CapEx). Share repurchases totaled €187.0 million for the quarter, purchasing 2.5 million shares.
US Expansion and Legal Victories Mark Operational Progress
Despite the challenges in Asia, Evolution continued its aggressive expansion plan, targeting over 110 new game releases for 2025.
North American Strategy
North America remains a growth driver, with customers heavily investing in new dedicated studio environments across the US and Canada.
- Second Brand Launch: Evolution relaunched Ezugi as its second Live Casino brand in the US, a key part of its growth strategy.
- Studio Expansion: Plans are underway to open a second studio in Michigan in the first half of 2026 due to high demand.
- Sweepstakes Caution: The company adopted a cautious approach to the Sweepstakes business in the US. Evolution immediately withdrew the product from Los Angeles after a personal legal interpretation from the City Attorney to avoid regulatory uncertainty.
Global Expansion and Products
Evolution opened its first Live Casino studio in São Paulo, Brazil, and another new studio in the Philippines. The company also launched a new slot brand, Sneaky Slots, and the highly anticipated Ice Fishing Live Casino title, a speed game show format.
Legal and Corporate
Evolution secured a legal victory in a long-running US class action lawsuit in the US District Court for the Eastern District of Pennsylvania. The lawsuit was dismissed in September, and the appeal deadline passed in early October, officially ending the case.
Playtech Smear Campaign
CEO Martin Carlesund confirmed that a lengthy legal process revealed competitor Playtech paid controversial intelligence firm Black Cube to produce a “defamatory and false” report against Evolution. Carlesund stated this action hurt the entire industry and vowed to use “whatever time, effort and money necessary to defend our firm” and seek justice.
The lawsuit against Playtech is expected to continue through 2026. The acquisition of Galaxy Gaming, Inc. is also on track and anticipated to close before the end of 2025.
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