Last Update28 Jul 25Fair value Increased 2.36%
Here’s a summary of the most important points from the Evolution AB Interim Report (January–June 2025), including key financials and the CEO’s comments:
📊 Key Financial Highlights
Q2 2025 (April–June)
- Net revenues: €524.3 million (+3.1% YoY)
- EBITDA: €345.3 million (margin: 65.9%)
- Profit for the period: €248.3 million (−7.7% YoY)
- Earnings per share: €1.22 (−4.5% YoY)
H1 2025 (January–June)
- Net revenues: €1,045.2 million (+3.5% YoY)
- EBITDA: €687.2 million (margin: 65.8%)
- Profit for the period: €503.0 million (−6.6% YoY)
- Earnings per share: €2.46 (−3.6% YoY)
🌍 Geographic Performance
- Asia: Revenue rebounded to €209.1M in Q2 (up from €201.9M in Q1)
- Europe: Decline to €180.2M in Q2 (from €189.7M in Q1), impacted by regulatory ring-fencing
- North America: Continued growth to €74.0M
- Latin America: Stable at €37.6M
🏗️ Strategic Developments
- New studios: Launched in the Philippines (first in Asia) and São Paulo, Brazil
- Entered Rhode Island: With online slot games
- Hasbro partnership: Exclusive global licensing for live casino and slot games, including MONOPOLY Live
🎮 Product Highlights
- Live Casino: 3.6% YoY growth; 4 new games launched in Q2
- RNG (Random Number Generator): Slight growth (+0.3%), impacted by a large payout
- Roadmap: Over 110 new releases planned for 2025
💬 CEO Martin Carlesund’s Comments – Key Takeaways
- Growth below expectations: While revenue grew modestly, the CEO expressed dissatisfaction with the pace, especially in Europe and Asia.
- Asia challenges: Cybercrime and stream hijacking remain issues, but new security measures are showing results.
- Europe: Regulatory ring-fencing led to revenue decline; however, the company supports regulation if balanced.
- North America: Strong momentum, with plans for a new studio in Michigan.
- Latin America: Optimistic about Brazil’s potential; São Paulo studio expected to boost growth.
- Innovation focus: Emphasis on new game development and partnerships (e.g., Hasbro, Bally’s).
- Outlook: Confident in stronger performance in H2 2025; EBITDA margin guidance remains at 66–68%.
Risks
- Financial risk management: market risk (including currency risk and cash flow interest risk), credit risk and liquidity risk.
- Political decisions and other legal aspects. 12/20/24 Regarding review by UK Gambling Commission. The review was initiated after the Commission identified Evolution games being accessible from the UK through operators not holding a Commission license. About 3% of Evolution’s revenue is from the UK market
- Operations subject to official approval. Evolution’s customers operate in a regulated industry, the laws and regulations of which are in a constant state of change.
- Disruptions to operations and information security breaches.Third quarter of 2024 presented two exogeneous factors that have had a negative impact on the quarter.Downsizing of Georgian studio due to sabotage activities. 60%.Significant increase in advanced cyber-attacks against our Asian video distribution thereby impacting our Asian revenue negatively.
- External anomalies like virus or geopolitical events.
- End users. As a B2B supplier, Evolution has customer relationships with gaming operators, who in turn own the relationships with the end users. Generally, the gaming operators are licensed in a limited number of jurisdictions while operating in a global market and allowing play from various geographic areas
- Dependence on key personnel and skilled employees: Approximately 87 percent of the Group’s employees work on tables as hosts and dealers
- Incentive programme The company has one incentive programme. Upon full exercise of the warrants within the programme 2023/2026 (adopted by the Extra General Meeting on 9 November 2023), the dilution effect will be approximately 0.9 percent
- Dependence on major customers. In 2023, the top five customers (in terms of revenue generated) contributed 41 percent (30) of Evolution’s revenue.
- Seasonality. Evolution’s operations are, to a certain extent, influenced by seasonal patterns in end-user activity. The Group’s customers generally notice increased end-user activity and an increased volume of operations in the fourth quarter of each year, which is consistent with the Group’s experience of increased online casino traffic and commission income earned in the fourth quarter.
- Counterparty risk. Primarily the risk of payment default by operators
- Competition. Competition is expected to continue to intensify as new live casino providers enter the market and existing providers improve and expand their product and service offerings.
- Intellectual property rights
- Risk management. Evolution is exposed to the risk of money laundering and fraudulent activities by its customers, end users and third parties, as well as the potential collusion by operators and end users.
- Tax situation. Evolution primarily conducts its business through subsidiaries that are active in the geographic markets in which it operates. Regulatory or legislative changes, or decisions by tax authorities, may impair the present, future or previous tax position of Evolution, which could have a material adverse effect on the Group’s business, financial position and profit.
Catalysts
The Online Gambling Market grew from USD 79.80 billion in 2023 to USD 88.33 billion in 2024. It is expected to continue growing at a CAGR of 10.57%, reaching USD 161.32 billion by 2030.
https://www.researchandmarkets.com/report/online-gambling
The company’s future development is mainly dependent on the development of the online casino market. Evolution’s medium to long-term objective is to grow faster than the total global online casino market.
And most importantly, the business model is scalable.
Acquisition of group companies
Evolution has acquired 100 percent of the share capital in Livespins Holdings Limited, a B2B social streaming game provider that enables operators to offer their players the opportunity to bet behind their favourite streamers, brand ambassadors and influencers. The up-front cash consideration was EUR 4.3 million net on a cash and debt free basis. In addition, Evolution may pay an earn-out based on Livespins’ performance in 2026. Livespins is included in the consolidated accounts, the effect on Evolution Group’s results of operations and financial position is not material.
Evolution has entered into an agreement to acquire Galaxy Gaming, Inc. for a total equity value of approximately USD 85 million, payable in cash. Closing is expected in mid-2025, Galaxy Gaming Inc. is therefore not yet included in the consolidated accounts.
Evolution has decided to extend the earn-out period related to the purchase of BTG until 2026. The earn-out liability has been reduced with EUR 59.7 million which is recorded as other operating revenues. Remaining earnout with net present value of EUR 102.7 million may be paid at the latest in 2026.
Main competitors
🥇 Evolution AB
- Leadership: Continues to be the leader in the global live casino gaming market.
- Innovation: 7 of the 10 most popular games of 2025 are from Evolution.
- Competitive advantages: Wide range of games (roulette, blackjack, game shows like Crazy Time).
- High-quality streaming and user experience.
- Strategic acquisitions like Ezugi and NetEnt have expanded its reach. Global presence: Strong in Europe, Asia, and North America.
- Challenges: Recent regulatory pressure in the UK.
🥈 Playtech
- Position: Second historically strongest competitor.
- Business model: Operates in many markets through exclusive agreements with betting houses like William Hill and Bet365.
- Strengths: Wide library of RNG and live games.
- Good presence in regulated markets.
- Limitations: Less innovation in game formats compared to Evolution. Some games are "locked" on specific platforms, limiting their reach.
🥉 Pragmatic Play
- Growth: It is rapidly gaining market share, especially in Europe and Latin America.
- Offer: Live games such as Mega Wheel Live and Sweet Bonanza CandyLand.
- Strong presence in slots and recent expansion in live games.
- Advantages: Agile distribution thanks to its network of operators.
Comparative chart between Evolution AB, Playtech, and Pragmatic Play with three key metrics for 2025
- Evolution AB: 45%
- Playtech: 30%
- Pragmatic Play: 25%
- Evolution AB: 50
- Playtech: 35
- Pragmatic Play: 20
- Evolution AB: 1.500 m €
- Playtech: 1.000 m€
- Pragmatic Play: 750 m €
Valuation
- Where do you think the business will be in 5 years time?4.000.000.000€
- What do you think revenue and profit margins will be?14% revenue increase and profit margins 45% due to the increase in personnel costs and the necessary investments in cybersecurity.
- What do you think the valuation multiple will be in the future?12X
- Risk level9%
How well do narratives help inform your perspective?
Disclaimer
The user kapirey has a position in OM:EVO. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
