Evolution reported a 3.7% increase in third-quarter revenue, reaching €526.1 million ($590 million). The casino gaming provider showed steady growth despite regulatory problems in Brazil and weaker performance in Europe.
CEO Martin Carlesund welcomed the company’s return to stability during an earnings call on Friday, October 23.
“This was an uneventful quarter, which I believe is something good,” Carlesund told analysts.
However, Brazil’s recent gambling ban could create significant challenges for Evolution during the final quarter of the year.
Evolution Q3 Revenue and Financial Performance
Evolution’s Q3 financial results showed moderate growth in revenue and earnings.
Adjusted EBITDA increased 2.7% to €345.9 million ($388 million). However, the adjusted EBITDA margin declined slightly from 66.4% to 65.8%.
Meanwhile, net profit fell 3.6% to €243.3 million ($273 million).
The company’s two main gaming divisions also reported revenue growth.
Live casino revenue increased 2.6% to €443 million ($497 million). At the same time, random number generator (RNG) game revenue climbed 10.1% to €83.1 million ($93 million).
These results suggest that demand for Evolution’s gaming products remained relatively stable during the quarter.
Strong Growth in North America and Latin America
Evolution recorded positive revenue growth across several major markets.
North America delivered a 13.6% increase in revenue. Latin America grew 23.1%, while Africa recorded growth of 23.7%.
However, Europe continued to struggle.
Revenue from European players declined 4.7% compared with the same period last year.
Carlesund acknowledged that the company needs to improve its European performance.
“No matter the regulatory situation or low channelization rates, we should do better,” he said.
The results highlight the differences between Evolution’s regional markets. While some regions are expanding rapidly, others continue to face regulatory and business challenges.
Brazil Gambling Ban Creates Uncertainty for Q4
Brazil became one of the biggest concerns during Evolution’s Q3 earnings call.
The Brazilian government recently introduced a ban on regulated online gambling.
Following the decision, Evolution closed its Brazilian studio on October 5.
The company has not confirmed when the studio might reopen.
President Lula, who signed the ban into law, won a surprise election victory on Sunday, October 25.
However, the ban still faces several legal challenges.
Carlesund criticized the government’s decision, arguing that it disrupted a regulatory system that had operated for only around 18 months.
He also confirmed that Evolution would be ready to restart its Brazilian operations quickly if the restrictions were removed.
How Much Revenue Could Evolution Lose?
Brazil represents less than half of Evolution’s Latin American revenue.
The region generated €49 million ($55 million) in Q3. These results were not affected by the ban because it took effect after the quarter ended.
However, the financial impact could become more visible during Q4.
During the earnings call, analysts asked whether Evolution could lose all its Brazilian revenue in the final quarter.
Carlesund did not provide a specific estimate.
He described the situation as highly unfortunate for the gambling industry.
Despite these concerns, Evolution has maintained its full-year margin guidance.
Evolution Plans to Slow Share Buybacks
Evolution has also announced changes to its share repurchase strategy.
By the end of September, the company had bought back approximately €1.13 billion ($1.27 billion) of its own shares.
These purchases form part of a larger €2 billion ($2.24 billion) buyback program.
However, CFO Joakim Andersson said the company plans to reduce the pace of repurchases during Q4 and Q1 2027.
The decision aims to keep share buybacks more closely aligned with the company’s cash generation.
Andersson explained that Evolution wants to maintain enough financial flexibility to support future investments.
This approach could help the company balance shareholder returns with its expansion plans.
Evolution Expands Its US Casino Operations
Despite uncertainty in Brazil, Evolution continues to invest in the United States.
The company plans to open its fourth New Jersey studio during Q4.
The new facility will also serve Delaware, helping Evolution expand its live casino operations across regulated US markets.
Once operational, the studio will bring Evolution’s total number of US hubs to eight.
New Spinning Whale RNG Brand
Evolution is also preparing to introduce Spinning Whale, a new RNG gaming brand designed specifically for American players.
The launch will support the company’s efforts to expand its digital gaming portfolio in the United States.
With growing operations and new products, Evolution aims to strengthen its position in the American gaming market.
What Comes Next for Evolution?
Evolution’s Q3 results show that the company continues to generate revenue growth despite regulatory challenges.
Strong performance in North America, Latin America, and Africa helped offset weaker European results.
However, Brazil remains a major source of uncertainty.
The gambling ban could affect Evolution’s Q4 revenue, especially if its Brazilian studio remains closed.
At the same time, the company is continuing its US expansion, developing new gaming products, and adjusting its share buyback strategy.
For now, Evolution’s future performance will depend partly on regulatory developments in Brazil and its ability to maintain growth in other markets.
