Evolution Grows Q3 Revenue 3.7% to €526.1m, Then Closes Its Brazilian Studio Under the Betting Ban

Evolution's chief executive called the third quarter "uneventful", and on the numbers it was: every region grew on the quarter and adjusted EBITDA landed on consensus. The news sat at the edges. The live casino supplier closed its Brazilian studio on 5 October, and spent €823.9 million on its own shares in three months.

• Evolution AB's net revenues rose 3.7% to €526.1 million in the third quarter and adjusted EBITDA rose 2.7% to €345.9 million, a margin of 65.8% against 66.4% a year earlier, according to its interim report published on 23 October
• Live revenue grew 2.6% to €443.0 million and RNG 10.1% to €83.1 million, while by player location Europe fell 4.7% year on year and North America, Latin America and Africa grew between 13.6% and 23.7%
• The studio in Brazil closed on 5 October after the federal betting ban, and Evolution says Brazil accounts for "well below half" of its Latin American revenue, which was €49.0 million in the quarter
• Evolution bought back €823.9 million of shares in the quarter, more than twice its €366.1 million operating cash flow, and has spent €1,127.1 million of its €2 billion programme after paying no dividend for 2025
• Costs included the €5.6 million UK Gambling Commission settlement and €6.5 million of termination and legal fees on the abandoned Galaxy Gaming deal, both stripped out of adjusted EBITDA

Every Region Grew on the Quarter, but Europe Is Still Shrinking on the Year

Evolution AB, listed on Nasdaq Stockholm as EVO, reported net revenues of €526.1 million for July to September, up from €507.1 million, or an estimated 4.0% at constant currency, according to its interim report. Adjusted EBITDA was €345.9 million, against €336.9 million. Reported EBITDA fell to €333.8 million, a margin of 63.5%, and profit for the period fell 3.6% to €243.3 million. Earnings per share still rose 4.8% to €1.31, because the average number of shares was 7.8% lower.

Against FactSet consensus, as reported by Finwire in Börsvärlden, revenue was slightly short of the €528 million expected and adjusted EBITDA slightly ahead of €345 million, while reported EBITDA missed the €343 million forecast because of the one-off costs. Chief executive Martin Carlesund described "an uneventful quarter with focus on core business", and said all regions had grown quarter on quarter for the first time since 2024.

By the IP address of players, Asia remained the largest region at €192.1 million, up 0.8% on the quarter and 1.6% on the year. The report does not repeat the second quarter's reference to cybercrime weighing on Asia, and does not mention ring-fencing. Europe brought in €173.7 million, up 0.4% on the quarter but down from €182.2 million a year earlier. North America rose 13.6% to €84.3 million, Latin America 23.1% to €49.0 million and Africa and other markets 23.7% to €27.1 million. Revenue from what Evolution classes as regulated markets rose 10.3% to €258.5 million, 49% of the total against 46%. By the location of its operator customers, the picture is different: Europe-based customers account for €336.3 million, almost two thirds of revenue.

Operating expenses rose 12.0% to €235.9 million, mainly on personnel costs from new tables and studio expansion, according to the report. Evolution had 23,408 employees at 30 September, up from 21,652, or 17,020 full-time positions. Operating profit fell 2.1% to €290.3 million.

Brazil, the UK Settlement and Galaxy Gaming

Other operating expenses included the €5.6 million settlement with the UK Gambling Commission and €6.5 million of termination and legal fees for the Galaxy Gaming acquisition, both excluded from adjusted EBITDA. The settlement, £4.75 million, ended a review of Evolution Malta Holding Limited's licence under Section 116 of the Gambling Act 2005 that began in December 2024. Carlesund said in July that it mainly related to Evolution content being available on six unlicensed websites in breach of its terms of supply. The Galaxy Gaming figure includes a $5.2 million termination fee.

The material event came after the period. Brazil's regulatory framework "was rolled back following a decision by the president", Carlesund wrote, and the Brazilian studio is "temporarily closed"; the report dates the closure to 5 October. President Luiz Inácio Lula da Silva's Provisional Measure 1.394, signed on 25 September, bans fixed-odds betting and online casino, and Congress is weighing 94 live amendments with a vote due by 23 November unless extended. Evolution says the outcome is unclear, that Brazil is "well below half" of Latin American revenue by player IP, and that momentum elsewhere in the region "will offset part of the impact".

The report contains no new financial outlook. In February, Carlesund said Evolution estimated it would deliver a 2026 margin in line with 2025, when the adjusted EBITDA margin was 66.1%; the nine-month figure is 65.7%. Evolution says Ice Fishing will roll out in North America in the fourth quarter and that Game Night, a Hasbro-licensed title, is due before year-end.

Brazil Is a Contained Hit to the Region That Was Doing the Growing

On Evolution's own numbers, the exposure is bounded. Latin America was 9.3% of third-quarter revenue, so a share "well below half" of it puts Brazil below roughly 4.7% of the group, by iGaming Times' calculation. That is far less than at Betsson, where Latin America is 36% of revenue. The difficulty is where the loss falls. Latin America grew 23.1% while Europe shrank, and the fourth quarter is the one Evolution's own seasonality note calls its strongest. If the ban holds, Brazil's contribution goes missing in that quarter, taking away part of what was offsetting Europe. How much depends on a Congress whose committee had no chair or rapporteur as of 16 October, so the hedged language in the report is the honest position.

The Buyback Is Now Doing the Work That Revenue Is Not

Profit fell and earnings per share rose. That is the buyback: €823.9 million in one quarter, more than twice operating cash flow, after the board proposed in March to pay no dividend for 2025 and then committed €2 billion to repurchases, backed by a €300 million revolving credit facility. Cash was €656.4 million at the end of September against €818.0 million at the end of 2025. Cancelling 16,168,492 shares cut the share count by about 8.1% to 183,058,121, which also raises the percentage held by any shareholder that does not sell, including Candle Lake, which passed 30% in July. With €872.9 million of the programme left, the question is how long per-share growth can be bought while group revenue grows in low single digits.

Half the Revenue Is Regulated, and the Other Half Is the Business Model

Revenue from regulated markets grew 10.3% and the rest fell 1.9%, by iGaming Times' calculation, so the mix is moving the way regulators and investors would want. It is moving slowly: 51% of revenue still comes from markets Evolution does not class as regulated. The two regional tables show why. Europe-based operators provide almost two thirds of revenue while European players provide a third, which the report explains as operators licensed in a limited number of jurisdictions allowing play from many. That model built Evolution's margin, and it is the model regulators examine, as the UK review over six unlicensed websites showed. On product, RNG growth of 10.1% is now close to the 11% to 12% Hacksaw expects after its slowdown, so a slots specialist is growing barely faster than Evolution's own RNG arm. Hacksaw has also moved into prediction markets; Evolution's report does not mention them.

Evolution delivered the quiet quarter its chief executive described and met the market's adjusted number. The fourth quarter, without Brazil and with the margin target still a few tenths away, is the one that will test it.