Evolution AB (EVO) has announced its earnings for the second quarter of 2026, which slightly underperformed compared to analyst expectations.
The Swedish gaming technology firm reported net revenues of €517.8 million ($591.9 million) for Q2, reflecting a 1.2% decrease from the €524.3 million recorded in the same period last year.
This revenue figure fell just short of the analyst consensus forecast of €520.0 million. The company's EBITDA was reported at €341.0 million ($389.9 million), with a margin of 65.9%, which also slightly missed the anticipated €343.5 million.
However, when adjusted for constant exchange rates, net revenue actually increased by 2.4% year-on-year, benefiting from a weaker US dollar in the Americas.
Despite the mixed results, there are signs of robust growth in the Americas, a rebound in Random Number Generator (RNG) revenues, and the resolution of a significant regulatory issue in the UK, which together paint a cautiously optimistic outlook for the B2B iGaming company.
Overall, the results reveal a complex yet resilient financial situation, indicating that the company is navigating a significant transition across various regions and market segments.
Earnings per share (EPS) reached €1.27, slightly below the expected €1.28, but still showing a 4.1% year-on-year increase.
This rise in EPS occurred despite the revenue decline, thanks to a reduced share count from buybacks and a positive shift in financial items, reporting a €3.1 million gain compared to an €11.9 million loss the previous year. For the first half of the year, net revenues totaled €1,030.8 million, down 1.4%, with an EBITDA margin of 65.6%.
In terms of geographical performance, North America and Latin America achieved record revenues, significantly contributing to the company's overall growth. Latin America saw a remarkable 26.3% year-on-year increase, driven by the reopening of the Argentine studio and the newly regulated Brazilian market, while North America grew by 9.5%.
Expansion efforts in Michigan, where a second studio is being developed, and the newly enhanced São Paulo studio in Brazil have begun to yield substantial benefits.
Conversely, Europe continues to pose challenges. The Group Live Casino revenue was €437.3 million ($500 million), down 3.6% year-on-year, primarily due to difficulties in the European market. Nevertheless, the region showed signs of recovery with sequential growth in Q2 following a sluggish start to the year.
The challenges in Europe are attributed to regulatory pressures, reduced market channelization, and the company’s proactive measures to comply with strict regulations.
For the past 18 months, Evolution has been under a comprehensive license review by the UK Gambling Commission (UKGC), which began in December 2024. Just two days before the earnings report, the company announced a £4.75 million ($6.4 million) settlement with the regulator, effectively concluding the investigation.
This resolution alleviates a significant burden that had negatively impacted the company's valuation for over a year, allowing Evolution to maintain its operating licenses in one of Europe’s most profitable markets without imposing crippling conditions on its business operations.
In Asia, however, revenue has declined by 3.7% quarter-on-quarter and 9% year-on-year, primarily due to ongoing cybercrime issues, including the illegal hijacking and restreaming of Evolution’s content. Despite these challenges, management believes that the underlying growth potential in Asia remains strong.