Evolution reports Q3 revenue of €526.1m as Brazil studio remains closed

Evolution reported Q3 revenue of €526.1m, an increase of 3.7% year on year, the company said. The live casino supplier's Brazilian studio has remained closed since 5 October, after the government banned regulated online gambling, and the company said it does not know when operations might resume.

“It’s highly unfortunate that populistic agenda can overthrow a regulatory framework that has only been in place for one and a half year”

Adjusted EBITDA rose 2.7% to €345.9m, while the margin narrowed from 66.4% to 65.8%. Net profit fell 3.6% to €243.3m. Live casino revenue increased 2.6% to €443m and RNG revenue climbed 10.1% to €83.1m. North America grew 13.6%, Latin America 23.1% and Africa 23.7%, while revenue from European players declined 4.7% year on year.

Chief executive Martin Carlesund told analysts on an earnings call on 23 October that the quarter had been uneventful, which he said he believed was something good. On Europe, he said: "No matter the regulatory situation or low channelization rates, we should do better."

Brazil dominated the discussion. Carlesund called it "highly unfortunate that populistic agenda can overthrow a regulatory framework that has only been in place for one and a half year." According to him, the company could restart operations fast should the government change course. Less than half of Evolution's Latin American revenue comes from Brazil; that region brought in €49 million ($55 million) in Q3, before the ban took effect. When analysts asked if Brazilian revenue would vanish completely in Q4, the CEO would not provide a number. He remarked: "I think that everyone is flabbergasted about the situation in Brazil, that it is a total negative for anyone in this business that it happens in this way."

The company's guidance for the full-year margin will stay as it is, Carlesund said. Lula, the president who put his signature to the ban, secured an unexpected win in the Sunday (October 25) vote. The report noted that the ban still faces several legal challenges.

As of the close of September, roughly €1.13 billion ($1.27 billion) of Evolution's own shares had been bought back within a €2 billion ($2.24 billion) programme. Joakim Andersson, the chief financial officer, explained to analysts that the pace of buybacks will ease in Q4 and Q1 2027 so that it tracks cash generation more closely. His words: "We want to push forward, and we want to be free to make the investment we need, and we want to be self-sustained."

In the US, Evolution is growing: a fourth studio in New Jersey is due to begin operating in Q4. Delaware will be served by that site as well, which lifts the company's American hub count to eight. A further plan is the debut of Spinning Whale, an RNG brand built for the American market.