Evolution FY2025: Revenue Flat, EBITDA Down 9%
Evolution delivered flat full-year revenue growth in 2025 alongside margin compression, as regulatory tightening in Europe offset expansion momentum in North America and emerging markets.
According to its year-end report, full-year net revenues rose 0.2% to €2.07bn, while Q4 revenues declined 3.7% year-on-year to €514.2m. On a constant currency basis, Q4 growth was approximately 4.9%.
However, profitability weakened. Full-year EBITDA fell 9.2% to €1.42bn, with reported EBITDA margin declining from 70.5% to 66.9%. On an adjusted basis, EBITDA margin settled at 66.1%, down from 68.4% the prior year.
Margin Compression Signals Structural Normalisation
Evolution remains one of the highest-margin suppliers in global gaming, but 2025 confirms a step down from its historical peak.
Operating margin fell to 59.4% (64.1% in 2024) as personnel costs and studio expansion weighed on profitability. Headcount increased to 22,475 employees globally, reflecting continued capacity buildout and geographic expansion.
Adjusted EBITDA excludes €51.7m linked to a reduction in earn-out liabilities, meaning reported profitability still benefited from accounting effects rather than pure operational leverage.
For operators, this margin recalibration matters. A sustained move from 70%+ EBITDA margins to the mid-60s range suggests tighter long-term pricing flexibility particularly as regulated exposure increases.
Europe Contracts as Regulatory Pressure Intensifies
Europe remains Evolution’s largest revenue source but showed continued weakness in Q4.
Revenue by customer location declined both sequentially and year-on-year in Europe, reflecting what management described as “unfavorable regulatory movements.”
Regulated market share rose to 47% of revenues in Q4, up from 41% a year earlier. While strategically aligned with long-term compliance, this six-point mix shift structurally pressures margins, as regulated revenue typically carries lower yield than grey-market exposure.
The ongoing UK Gambling Commission licence review adds further uncertainty heading into 2026, reinforcing Europe as the key regulatory swing factor.
US Expansion Becomes Strategic Priority
North America continued to grow during the quarter, with Evolution reiterating its focus on the US as a primary growth engine.
The company relaunched its Ezugi brand in New Jersey and announced a new studio in Grand Rapids to support Michigan expansion, signalling a multi-brand strategy aimed at increasing Live penetration across regulated US states.
Live casino remains Evolution’s structural core, generating €1.77bn in full-year revenue versus €294m from RNG. The supplier’s earnings profile remains heavily dependent on sustaining Live dominance as the US market matures.
Asia Rebounds, Latin America Builds
Asia showed sequential improvement in Q4, while IP-based revenue data indicates the region remains a significant underlying contributor despite volatility, while Latin America delivered year-on-year gains overall, although Q4 customer-location revenues declined sequentially to €50.3m (page 5), reflecting quarter-to-quarter volatility despite Brazil’s regulatory momentum.
However, IP-based revenue data shows Asia remains a significant contributor when measured by player activity, underlining the complexity between customer domicile reporting and underlying player geography.
Africa and other markets also continued to expand, reinforcing Evolution’s diversification outside Europe.
Customer Concentration Improves
The five largest customers accounted for 39% of 2025 revenues, down from 46% in 2024. The largest single customer represented 12%.
This declining concentration reduces counterparty risk and strengthens Evolution’s negotiating position with Tier 1 operators, particularly as the supplier scales further in regulated jurisdictions.
Capital Allocation Remains Aggressive
Operating cash flow reached €1.26bn. Evolution returned €572.5m in dividends and repurchased €500.2m of shares during the year.
With €818m in cash at year-end and an equity ratio of 73.8%, the balance sheet remains robust, supporting continued studio investment and optionality for further M&A.
The pending acquisition of Galaxy Gaming remains incomplete, but would strengthen proprietary table game IP if finalised.
Strategic Outlook
Evolution enters 2026 facing three defining dynamics:
- Structural margin recalibration amid a rising regulated revenue mix
- Accelerated US studio expansion and multi-brand positioning
- Increased compliance exposure reducing grey-market volatility
Growth has slowed from historic highs, but scale advantages, global studio footprint and Live vertical dominance remain intact.
The key question for 2026 is whether the current ~66% EBITDA margin profile represents a new normal as regulated exposure rises, or if scale efficiencies can restore expansion.
Source : Evolution FY2025 Year-End Report
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