Evolution Shifts Focus to Americas Amid Europe Decline

Evolution reported a slight decline in revenue for the first quarter of 2026, as regulatory challenges in Europe weighed on performance while operations in the Americas continued to expand.

The Sweden-based gaming supplier posted net revenue of €513 million for the quarter, down 1.5% from the previous year. The results fell short of expectations across several metrics, including EBITDA and earnings per share, reflecting what executives described as uneven regional performance.

Chief executive Martin Carlesund pointed to Europe as the primary source of weakness. He said “regional development ‘was somewhat mixed in the quarter, [as] Europe is not performing well at the moment’,” highlighting the contrast with stronger results elsewhere.

Stricter regulatory frameworks across several European markets have affected both operators and suppliers. Measures such as affordability checks, betting limits, and higher taxes have reduced high-value player activity and increased operating costs.

Carlesund attributed part of the decline to falling channelisation rates, where players shift from regulated platforms to unlicensed alternatives. “Due to that regulation in some markets fails to strike the right balance between player protection and entertainment, players continue to access unregulated operators and channelisation is decreasing fast and significantly. This harms the total business and the most vulnerable players lose the player protection of playing of regulated operators and search by products from Evolution,” he said.

He identified the United Kingdom, the Netherlands, and Sweden as key areas where these trends have been particularly visible.

The company also continues to feel the effects of its own compliance measures, including efforts to restrict services to unregulated markets. These steps followed scrutiny from regulators, including an investigation by the UK Gambling Commission. While executives maintain that the approach supports long-term stability, they acknowledged it has reduced profitability in the short term.

Despite current challenges, Evolution maintains that Europe remains important over time. Carlesund suggested that regulatory frameworks may eventually evolve to encourage players back toward licensed platforms.

While Europe has slowed, Evolution’s operations in North America and Latin America have recorded steady gains. Both regions reached record revenue levels during the quarter, supported by continued expansion in online gaming markets.

Carlesund said the Americas showed “great momentum” and “steady growth,” with North America benefiting from ongoing legislative support for iGaming. Growth in the region reached around 21% year-on-year when measured in local currency, reflecting strong demand despite currency fluctuations.

Latin America has also emerged as a central focus, particularly as regulated markets such as Brazil continue to develop. The company has increased investment in infrastructure and staffing across the region, including the acquisition of a developer in Argentina.

Evolution’s workforce has expanded significantly, with thousands of new employees added in markets such as Brazil and the United States. These hires, along with the construction of new studios, have increased upfront costs and contributed to lower margins during the quarter.

Chief financial officer Joakim Andersson emphasized that the company is prioritizing long-term positioning over immediate returns. “This quarter is about ensuring we have the ‘dry powder’ to dominate the US table-game market by year-end,” he told analysts.

The company is directing capital toward studio development and technology upgrades, particularly in the Americas. Pre-opening expenses tied to new facilities and recruitment have weighed on margins, which came in below full-year guidance for the quarter.

Executives indicated that these costs are temporary and expect improved performance as new tables and studios become operational later in the year. Andersson noted that current expenditures include salaries and infrastructure costs incurred before revenue generation begins, but operating leverage is expected to improve as capacity increases.

Evolution is also continuing with its planned acquisition of Galaxy Gaming, a deal valued at approximately €85 million that is expected to close later this year. The acquisition forms part of a broader strategy to strengthen its position in table games.

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Beyond the Americas, Evolution reported progress in Asia, where it has been working to enhance distribution networks and tailor content to local markets. The company has introduced region-specific games and improved technical delivery to address varying internet infrastructure conditions.

Africa has also shown growth, albeit from a smaller base. New game releases have gained traction, and the company’s offerings in the region continue to expand.

Overall, nearly half of Evolution’s revenue—around 48%—came from regulated markets during the quarter, based on internal estimates.

While the European market remains mature and subject to regulatory pressures, Evolution is redirecting its focus toward regions with higher growth potential. The company plans to continue investing heavily in North and South America throughout 2026, positioning those markets as central to its future expansion.

Source:

“Evolution pivots to Americas as regulated revenue sits at 48%“, igamingbusiness.com, April 23, 2026.