Oct 07, 2026 | 2:53 am
Evolution reported a return to year-on-year revenue growth in the third quarter of 2026, ending a four-quarter decline, as uncertainty surrounding Brazil's betting ban and weaker European results complicated the outlook for the live casino supplier.
Net revenue increased 3.7% to €526.1 million for the three months ended September, according to the interim report published on 23 October. Adjusted EBITDA rose 2.7% to €345.9 million, although profit for the period fell 3.6% to €243.3 million.
Chief executive Martin Carlesund addressed the Brazilian market suspension, the company's performance in Europe and continuing cybercrime affecting its Asian distribution during the post-results earnings call. Evolution has temporarily closed its Brazilian studio following the government's decision to ban licensed betting, while awaiting further clarity on the regulatory situation.
Despite these challenges, Carlesund maintained the company's full-year margin guidance. He also indicated that Evolution remained prepared to resume operations in Brazil if circumstances allowed.
Brazil Ban Leaves Evolution Waiting for Regulatory Clarity
Brazilian President Luiz Inácio Lula da Silva signed the measure banning fixed-odds betting and online casino games on 25 September, less than two years after the country's regulated online market launched. Licensed gambling websites went offline from 6 October, and Evolution closed its São Paulo studio on 5 October because of the uncertain regulatory conditions.
Carlesund expressed strong dissatisfaction with the decision during the earnings call.
“I think that everyone is flabbergasted about the situation in Brazil,” he told analysts. “It’s a total negative for anyone in this business, that it happens in this way. It’s highly unfortunate that a populist agenda can overthrow a regulatory framework that has only been in place for a year and a half.”
The sector is awaiting a ruling from Brazil's Supreme Federal Court on whether the ban was unconstitutional. Evolution has kept the possibility of restarting its Brazilian operations open, with Carlesund saying the studio could reopen at short notice.
Carlesund also said Brazil accounts for “well below half” of Evolution's Latin American revenue, based on its estimated breakdown by player IP address. The company generated €49.0 million in Latin American revenue on that basis during Q3, and Carlesund expects momentum elsewhere in the region to offset some of the impact.
The region recorded year-on-year growth of 23.1% by player IP address, although that figure did not capture the effects of the suspension, which took effect in October.
European Results Weigh on Quarterly Performance
Evolution's return to growth followed year-on-year revenue declines in each of the previous four quarters. Live casino revenue increased 2.6% to €443.0 million in Q3, while RNG revenue rose 10.1% to €83.1 million.
Adjusted EBITDA reached €345.9 million, representing a margin of 65.8%, down from 66.4% a year earlier. Operating profit declined 2.1% to €290.3 million, while net profit fell from €252.3 million to €243.3 million. Earnings per share nevertheless increased 4.6% to €1.31, partly because the average number of shares outstanding dropped to 186.0 million from 201.8 million following share buybacks and cancellations.
Operating expenses increased 12.0% to €235.9 million, with higher personnel costs reflecting additional studio tables and broader expansion. Personnel expenses reached €124.3 million, compared with €117.5 million a year earlier.
Two exceptional items added €12.1 million to costs. Evolution paid a €5.6 million settlement to the UK Gambling Commission, equivalent to £4.75 million, and incurred €6.5 million in termination and legal expenses after ending its merger agreement with Galaxy Gaming. The latter included a $5.2 million termination fee. Both items were excluded from adjusted EBITDA.
Regional figures based on customer location showed Europe revenue falling 6.0% year on year to €336.3 million. North America grew 11.0% to €81.0 million, while Latin America increased 39.3% to €76.6 million. Asia revenue reached €19.1 million, up 42.5%, and Africa and other markets rose 61.7% to €13.1 million.
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Asian Cybercrime and Legal Dispute Remain Unresolved
Evolution continues to face cybercrime affecting the distribution of its products in Asia, a problem the company highlighted last year. Carlesund previously said: “Someone is stealing our products.”
Updating analysts on the situation, he said: “Asia increased by 0.8% quarter-on-quarter and by 1.6% year-on-year.” He added: “It’s one small step forward compared to Q2, but you all know that there is no quick solution to these cybercrime issues that we continue to see.”
Carlesund said Evolution's technical work was progressing and that the company was pursuing a long-term response, while acknowledging that performance could remain volatile.
The supplier is also continuing its legal dispute involving Playtech. Playtech commissioned intelligence firm Black Cube to investigate Evolution's activities in 2020, resulting in a dossier alleging that Evolution supplied games in prohibited and sanctioned markets. Evolution subsequently sued Black Cube and has sought to hold Playtech accountable in the related defamation case.
Carlesund declined to discuss the substance of the dispute, saying: “We are in a full lawsuit with them, and that will continue as we go forward. We’re doing everything we can, and now there’s new steps taken every day.”
Beyond its immediate challenges, Evolution launched Monopoly Roll’em and Disco Balls during the quarter and introduced US-focused slots brand Spinning Whale. It plans to release Ice Fishing in North America during Q4 and launch Game Night under its Hasbro partnership before year-end.
Source:
“Evolution CEO ‘flabbergasted’ by Brazil betting ban as company awaits clarity“, igamingbusiness.com, October 23, 2026.