Evolution Q3 2026 Results: Revenue Rises, Profit Falls

Key Points

• Revenue picked up 3.7% to €526.1 million, but that’s not the whole story, net profit took a 3.6% hit to €243.3 million, and it wasn’t pretty.
• Evolution binned the Brazilian studio on 5 October and that’s still a bit of an unknown quantity, and their CEO Martin Carlesund has admitted as much.
• Share buybacks of €823.9 million far outstripped cash from operations, which makes the whole earnings per share thing a pretty big deal.

Evolution Q3 2026, Revenue’s Back In Town, But Brazil’s Gone Dark and Costs Keep Climbing

Evolution managed to bump up their net revenue by 3.7% to €526.1 million in the last quarter, which means they’ve finally ended that four-quarter streak of year-on-year declines. But don’t get too excited, their profit actually took a 3.6% dive to €243.3 million, largely because of a 12% leap in operating costs. Then, just to make things more complicated, Evolution closed down their Brazilian studio on 5 October after a presidential decision suddenly changed the rules. And according to their CEO Martin Carlesund, the period was a “pretty uneventful quarter”, which just doesn’t quite add up.

Growth’s Back, Baby! But Only Just

Live casino drove Evolution’s revenue, with a respectable 2.6% lift to €443 million, although that’s not saying much, considering how poor the last few quarters have been. Random number generator games did a bit better, with a 10.1% jump to €83.1 million. And to top it off, they even launched a new US-focused slot game, Spinning Whale, in the quarter. The plan is for them to expand it across more of North America starting in November, which is a pretty good place for them to be. After all, slots are where the action is in the North American market.

Adjusted EBITDA only managed to increase by 2.7% to €345.9 million, while its margin actually shrank to 65.8% from 66.4%. On the other hand, every region did manage to grow quarter-on-quarter, which is the first time that’s happened since 2024, and it’s a pretty big deal. The previous quarter had seen revenue drop 1.2% year on year to €517.8 million, which just shows how far behind things have come.

Two Different Maps of the Same Business

Evolution likes to show off its regional performance in two different ways, and it’s not just a matter of which one to use, it really does make a difference when it comes to understanding the business. So by customer location, Europe looks like it had a 6% decline to €336.3 million, which accounts for almost two-thirds of the total revenue. But by player location, it’s a different story altogether, Europe’s revenue actually fell 4.7% to €173.7 million, while Asia took the prize with €192.1 million. There’s a reason for this: operators can serve players across lots of different markets, even if they’re only licensed in a few places.

North America, Latin America and Africa all saw their revenue figures go up, and by player location, they jumped 13.6%, 23.1% and 23.7% respectively. And the good news (if you can call it that) is that regulated markets now account for 49% of the total by player location, up from 46% last year. But of course, the elephant in the room is Brazil’s closure, which highlights the risks that come with shifting towards regulated markets, it’s not all sunshine and rainbows. The government can pull the rug out from under you at any moment, just like that.

Asia’s growth was a bit of a disappointment, only 1.6% year on year, and Martin Carlesund has said that the cybercrime problems in the region won’t go away anytime soon.

Costs Soar as Profit Line Takes a Hit

Evolution’s operating expenses have skyrocketed to a whopping €235.9 million, up from €210.5 million just a year ago. To put that into perspective, lots of that extra cash is going straight into higher staff costs, mainly those new studio setups. Personnel expenses alone clocked in at €124.3 million, that’s a serious chunk of change.

To make matters worse, two one-off expenses are adding another €12.1 million to the bill, and those aren’t even included in the company’s adjusted EBITDA. What’s even more interesting, one of those expenses came in the form of a €5.6 million settlement with the UK Gambling Commission, which is just a fancy way of saying a big payout, equivalent to £4.75 million, no less. As for the other one-off expense… that’s a £6.5 million hit just for terminating and paying off the costs associated with their abandoned merger with Galaxy Gaming. Needless to say, expenses have gone up while their operating profit has fallen by a pretty sizeable 2.1% to a still respectable €290.3 million, but let’s just say their net profit isn’t exactly thriving either.

Brazil Studio Shuts Down and the Law Awaits its Fate

President Luiz Inácio Lula da Silva has signed this thing called Provisional Measure 1,394. It’s a measure to ban fixed-odds betting and online casino games nationwide, that’s pretty much all online gaming in one hit. It was introduced on 25 September, and already Evolution’s Brazilian studio is shutting down on 5 October.

Now here’s the thing, Congress has until 23 November to sort this whole thing out, but if they don’t, come 9 November the whole government operation goes into emergency mode and blocks all voting until further notice. That might sound dramatic, but basically the guy who signed the measure can backtrack pretty easily. It’s not a done deal by any stretch, not unless Congress gets on it and confirms it.

Carlesund made a pretty good point, in this report he says the president has basically rolled back the rules just like that. He blamed it on Lula’s populist agenda, basically saying that this new measure has just overturned all the rules that were put in place just over a year and a half ago. 62% of people polled seem to approve of the decision, that’s from a survey of 2,004 people on 24 to 27 September, in case anyone was wondering. Of those polled, 40% had already heard of the measure, and another 22% only started to approve once they heard about it. Yeah, this measure is pretty divisive, you know?

Evolution reckon Brazil only accounts for a pretty small part of their Latin American revenue, and that’s from players based in the region. They did say that it’s “well below half”, a vague term to be sure, but they did say that the region did manage to pull in a pretty solid €49.0 million, representing about 9.3% of the group’s total revenue.

This does have potential to cost them though, Latin America is one of their fastest-growing regions and shutting down the studio means they lose that flow of money. And to make things worse, the fourth quarter is usually when business starts to pick up which means losing out on Brazil could have a pretty nasty ripple effect.

During the earnings call, one of the analysts asked Carlesund if Evolution were to lose all revenue from Brazil, his response was pretty much, game over. “There is no ring fencing there,” he said.

Carlesund said that the company’s full-year margin is still on track to match last year’s targets. The adjusted margin is at 65.7% so far this year, and they’re shooting for 66% by the end. He did admit that he was expecting things to become a bit clearer after that 25 October runoff in which Lula got re-elected with 51.79% of the vote, but the measure still hadn’t been solidified into law.

The Buyback Story Per Share

Evolution splashed out €823.9 million on buying back its own shares in the last quarter, a pretty big number when you compare it to the €334.1 million in operating cash flow after investments. To be clear, share buybacks in the quarter were nearly double that operating cash flow. Cash and cash equivalents slumped from €818.0 million at the end of 2025 to €656.4 million.

The company confirmed a €2 billion buyback plan back in May and so far has spent €1,127.1 million buying back shares under this programme. CFO Joakim Andersson has told us the share buyback programme will continue into the first quarter but it will be a lot slower than it was.

What Comes Next for Evolution?

Evolution plans to roll out Ice Fishing in North America during the fourth quarter, which is closely followed by the launch of Game Night sometime before the end of the year. It is also planning to open a new studio in New Jersey in the same quarter, this studio will serve not just New Jersey but also Delaware.

Analysts have got some very different views on Evolution. Investing.com counted three buy eight holds and five sell ratings over the three months leading up to 23 October.

Expert Analysis. A Quarter Where Quietness Raises Big Questions

We think describing this as an “uneventful quarter” does the actual numbers a disservice. Actually, profit went down, costs went up by around 12% and a big market which Evolution really depends on, closed just days after the quarter ended.

Our main worry is how much of Evolution’s earnings per share growth is actually thanks to buybacks rather than solid business growth. If the buyback pace keeps up at this level the company will either have to drain its cash reserves or change its capital allocation priorities, which as it is, the company is already doing by slowing down the purchases. Brazil accounts for less than 5% of Evolution’s business but we are worried this could knock growth further back. The other growth engine for Evolution, Latin America, helped fill the gap left by Europe but this growth engine is now threatened by the Brazil closure. Europe is a bigger concern for us than it would seem given the calm tone of the report. A supplier of Evolution’s said it could do better and this is basically admitting its performance is not keeping up with demand. Europe-based customers still generate almost two-thirds of Evolution’s revenue so this is clearly a major concern.

Two bits of information during the earnings call really caught our eye. In response to being asked about what is happening with the lawsuit Evolution has against Black Cube, Carlesund said he was unable to comment. Yet the report says the lawsuit, which has been ongoing since 2021 is expected to drag on through 2026. We think this is something that Evolution should really be talking about.

Analysts also asked Carlesund about how much money comes from what Playtech considers to be “prohibited” markets. His response was just not to comment.

Evolution supporters will say it still has a 65.8% margin, plenty of cash flow and little to no debt. True these are strengths but they are also the kind of thing that will help the company absorb the impact of the Brazil closure.