Evolution Disappoints Despite Earnings Beat and Monopoly Roadmap; Stock Drops 5% | Gambling Insider

Evolution (EVO) reported disappointing Q4 2025 earnings in its end-of-year financial results released before the start of trading today.

There was a miss on analyst consensus net revenue and adjusted EBITDA forecasts, with performance weighed down by regulatory developments in Europe. 

However, the Swedish-based leader in live casino and RNG services registered a beat on EPS of €1.54 ($1.82) against a forecast of €1.23 ($1.45).

Nevertheless, the market was not impressed. Two hours after the opening bell on the Swedish Nasdaq, Evolution’s stock price had fallen 5.16% to SEK555 ($61.38), erasing all of Wednesday’s 4% gain.

Net revenue came in at €514.2 million ($606.2 million), below the forecasted €517 million ($608.3 million) for the quarter, corresponding to a year-on-year decline of 3.7%, while adjusted EBITDA was €341.5 million ($402.6 million) versus the consensus forecast of €344 million ($405.5 million).

Unregulated Providers Creating Issues in Europe

Additionally, the shine was probably taken off the earnings beat by its comparison to Q4 2024 EPS of €1.83 ($2.16), suggesting the company is still struggling with headwinds in Europe, and perhaps the US, too. 

In Europe, the company bemoans the fact that unregulated providers are unfairly sucking up business:

“The current challenge is not actual ringfencing, but instead the channelization decline. … Put simply, the players are, by the regulation, pushed out of the regulated remit … playing on unregulated operators that we don’t accept,” says Evolution CEO Martin Carlesund.

“This is bad for the industry and pushing out the most vulnerable, but long term, we believe that the regulatory scale will find its balance again.”

Metric	Analyst Consensus	Actual Result (Q4 2025)	Performance
Net Revenue	~€517 million ($610.7)	€514.2 million ($607.2)	Slight Miss
Adjusted EBITDA	~€344 million ($406.3)	€341.5 million ($402.6)	Slight Miss
EBITDA Margin	66.50%	66.40%	In-line
EPS (Earnings Per Share)	~14.02 SEK (~€1.23) (US$1.45)	€1.54 ($1.82)	Beat

Long-Running Galaxy Gaming Deal To Close ‘Before July 17’ 

Although not mentioned in Carlesund’s written commentary accompanying the financial report, the acquisition of Galaxy Gaming, announced in July 2024, has not yet closed. 

Carlesund did, however, address the issue in the earnings call. There was pushback from leadership against the suggestion that there were problems with the Galaxy Gaming acquisition. The company expects to complete the deal before July 17. 

“We are still working to get master regulatory approvals, to complete execution of Galaxy,” the CEO said. “Only two states remain, where Nevada is one.”

Carlesund added: “I have seen some speculation that this may cause an issue for us to get the approvers. The process is moving forward, and we are still within the timeline of closing before the 17th of July, and I have no further comments for the time being.”

Hasbro Deal Highlights Product Launches

Adjusted EBITDA margin was within guidance for the quarter, coming in at 66.4%, although slipping to 66.1% for the calendar year.

In Europe, the company has been “burdened by unfavorable regulatory movements” despite its proactive approach to ringfencing.

Still, the company can point to the multi-year exclusive licensing deal with Hasbro, which underpins an aggressive product rollout for 2026, Evolution’s 20th anniversary year. 

Highly anticipated titles Monopoly, Filthy Rich, and Game Night are expected to launch in Q1-Q2, while Monopoly Deluxe is already out. The company expects to release 119 new titles in 2026. 

New games coming from Evolution in 2026

Playtech Lawsuit ‘Moving Forward’, More To Do in Europe

On the call, Deutsche Bank analyst Richard Stuber asked about the Playtech litigation. Carlesund was fairly tight-lipped but said, “We look forward to moving forward with the lawsuit.” He reiterated that for Evolution’s customers and others in the industry, the revelations were “shocking for many”.

Playtech is accused of paying private intelligence firm Black Cube $1.8 million in 2021 to write an allegedly nefarious report on its competitor. 

Analyst Martin Arnold from DNB Carnegie got to the heart of things when he asked about the regulatory issues in Europe, where the company generates 71% of customer revenue (14% North America), and the company admitted it had been a bad quarter.  

Carlesund responded, “You can always do better… adding the games that we have on the roadmap will, of course, make a difference, and I look forward to doing that.

“So, there’s more to do always, but the baseline is that a little bit [more] stable environment would be very nice.”

‘More stability’ was a mantra the CEO repeated several times during the call. 

Hasbro Deal Lines Up Impressive Roadmap, but Channelization is a Worry 

Arnold followed up with a question about the reception for the Hasbro Monopoly games among Evolution’s customer network since their initial introduction at last year’s ICE Barcelona conference.

The CEO was effusive:

They are flabbergasted. Everyone looks at the games and are like, ‘wow, when are we gonna get them?’”

“Everyone looks at the games, like, there is nothing in comparison,” he continued. “There is no one else doing anything else that is even remotely doing what we do.

“So when they look at our roadmap, they are like, ‘Oh, when can we have it?’”

Cybercrime an Issue in Asia

In other news from the earnings call, Evolution has for the first time split out revenue by player metrics based on IP address. The latter, according to the company, provides “an approximation of the location of the operators’ customers at time of playing”. 

The move is a response to the growing importance of channelization, as regulators take more interest in the origin of players, particularly whether they are in regulated or unregulated jurisdictions. 

A high channelization rate indicates a high proportion of players are in safe, regulated jurisdictions. Carlesund says channelization is falling in certain markets, which will impact performance.

Although, as mentioned, the lion’s share of Evolution’s customers are in Europe, the top region for player revenue generation is Asia, at 38% – that’s why the cybercriminality issues in the region are such a problem for the company. Only 3% of Evolution’s actual business customers are in Asia.

Source: Evolution

Record Revenues in the Americas

On the expenditure side, there has been a 5.8% year-over-year increase in headcount, though this is partially offset by a 3.8% quarter-over-quarter increase in the game round index (a measure of game round development weighted by revenue contribution). 

The company now has 870 customers, with a lower dependency on the top five, decreasing from 46% in 2024 to 39% in 2025. The largest customer accounts for only 12% of revenues. 

While Europe experienced a decline due to regulatory developments, North America and Latin America reported record revenues, driven by growth in Brazil, where new regulations are settling in, and the launch of new studios. The studio footprint has expanded to 24 locations worldwide.

It was also reported that the number of tables has increased by 300 in 2025, linked to new studio openings in Brazil, the Philippines, Romania, and the US.

Chief Financial Officer Joakim Andersson reported a slight increase in operating expenses, but the company is still seeing benefits from efficiency initiatives. He also highlighted Evolution’s strong financial position, with a cash balance of €818 million ($966 million) and a total equity position of €4.1 billion ($4.84 billion).

Evolution continued to return value to shareholders in Q4. Buybacks continued, at €93.7 million ($1,106.8 million) for 1.6 million shares. Since 2020, €3.5 billion ($4.13 billion) has been returned to shareholders, and in 2025 alone, €1.1 billion ($1.3 billion) was distributed, equating to an overall yield of 9.3%.

Source: Evolution

Progress on Combating Cybercrime in Philippines

Despite the challenges, the company is clearly optimistic about improving its business and addressing cybersecurity in the coming quarters. 

The company is also exploring the potential of AI in its products and services, with a focus on virtual dealers and support tools, but “real life, real physical events, will still be there for the years to come,” Carlesund insists.

Strategic focus remains on all markets, with upcoming launches in the US, after the rollout of its second live casino brand, Ezugi, and expansion in Latin America. 

Back in Europe, the UK Gambling Commission (UKGC) investigation into whether there has been black-market activity on Evolution-supplied products remains a looming threat. The company is also monitoring developments in Russia regarding online gaming regulation.

Coming back to other aspects of the points on Europe and Asia raised by analysts, Carlesund added:

Speaking about Europe, we can note that we haven’t heard anything from the UK Gambling Commission since last summer, in relation to their investigation. … We don’t know when they will come back, but we have been very cooperative, and, as always stated, have had very strict ringfencing measures in place since very early last year.

“For Asia, I’ve already said that we have made some progress in the cybercrime mitigation, [but] the overall regulatory dynamics continued to be somewhat challenging.

“But at the same time, we see good development in the Philippines, where the regulatory framework is getting more stable.”

Asia turned the corner in Q4 2025, returning to growth, “signaling some progress in our hard work to combat cyber criminality”.

Reading between the Lines: Q1 a Little Weaker?

Rasmus Engberg, Head of Swedish Equity Research at Kepler Cheuvreux, asked why, for the first time in its reporting history, Q4 financials were weaker than Q3.

The CEO’s response was somewhat defensive.

“There’s no difference in our performance or the way they react or [in] relation to our customers; everything is fine. But the market was not in favor during Q4. That’s a fact.”

In a follow-up about the seasonality in the numbers when comparing Q4 and Q1, Carlesund said Q4 tends to be stronger: “If I was to take online gaming as a global phenomenon, I would say that Q4 is stronger, Q1 is a little bit weaker than Q4, but still a good quarter. But then, of course, February has 8% less days.”

That could be interpreted as unofficial forward guidance suggesting that the start of 2026 could end up booking another relatively poor quarterly performance.

Going back to the prospects for profitability improvement, Monique Pollard, a Senior Equity Analyst at Citigroup, cut to the chase, noting Q4 EBITDA margin was at the low end of guidance. Is this because of expanding studio capacity putting downward pressure on margins, or is it a “lack of being able to scale the top line”?

The answer from the CEO was “a little bit of both”, with the added caveat that “when new countries open up, and with their regulations and rules … it will, of course, have an impact on marketing. That’s difficult to speculate on.”  

For sure, Evolution has work to do, yet its strong product roadmap and the live casino opportunities in the US give it the space to boost revenues and profits.

And, to be fair to Carlesund, some critical factors may indeed be out of his hands. The adverse market reaction to the year-end report may prove to be an overreaction.