Evolution Q3 revenue slightly misses estimates, margin declines

Overview

• Sweden B2B casino supplier's Q3 revenue rose 3.7% yr/yr, slightly missing analyst expectations

• Adjusted EBITDA margin for Q3 was 65.8%, down from 66.4% a year ago

• Company temporarily closed Brazilian studio due to regulatory uncertainty, expects LatAm growth to offset impact

Outlook

• Company to launch Ice Fishing in North America in Q4 2026

• Evolution to launch Game Night title before end-2026

• Company says Brazil regulatory changes create uncertainty; LatAm momentum expected to offset some impact

Result Drivers

• REGIONAL PERFORMANCE - Co said all regions reported qtr-on-qtr growth, with strong yr/yr increases in North America, LatAm and Africa

• PRODUCT SEGMENTS - Co said both Live and RNG segments grew yr/yr, with RNG up 10.1% and Live up 2.6%

• NEW GAMES - Co launched several new games and a US-focused slots brand during the qtr

Company press release:

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 8 "hold" and 8 "sell" or "strong sell"

• The average consensus recommendation for the casinos & gaming peer group is "buy."

• Wall Street's median 12-month price target for Evolution AB (publ) is SEK712.50, about 12.3% below its October 22 closing price of SEK812.00

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 11 three months ago

Reuters Recommended Reads

• Oct 22 - Sweden's Betsson Q3 revenue rises 10% on casino growth

• Oct 20 - Betting giant Flutter to axe up to 1,400 jobs in UK and Ireland as tax hike bites

• Oct 21 - French betting group FDJ United's 9M revenue falls on fewer jackpots and tax hikes; cuts FY outlook

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)