Evolution Group AB CEO Martin Carlesund told analysts during the game developer’s full-year 2025 earnings call on Thursday that he was “not happy” with its Q4 performance in Europe.
“There is instability in the market, and some countries are not developing as we want,” he said. He blamed low channelisation on sequential decline for the continent.
“There is a situation in Europe where channelisation drops to 50% in some countries. That affects us as we only supply 50% of the market,” Carlesund added.
Europe revenues dropped 8% year-on-year to €366.7 million in Q4 2025. Evolution did not provide a full-year revenue breakdown by region.
Carlesund said he believed the supplier has “the strongest ring-fencing measures in place among all [the sector’s] suppliers”, but he also put losses down to “regulated markets losing ground”.
Evolution sought to exit unregulated markets across Europe in Q1 of 2025. This involved adopting geolocation blocking technology across Europe to ensure its games were provided only in locally licensed markets.
It came as a response to a Gambling Commission investigation into the supplier providing games to unlicensed operators in the UK.
In July, Carlesund reported that the ringfencing efforts had proven more expensive during the first half of the year than the company had anticipated.
On its UK Gambling Commission investigation, Carlesund told analysts on the Thursday call the company was still waiting for an update from the regulator. He had previously expected that to come in December 2025.
Evolution revenue flat in 2025
Overall net revenue for the group remained largely flat for the full year at €2.07 billion, a 0.2% increase from 2024. Live games accounted for 86% of group revenue for the year.
Operating expenses amounted to €860.9 million, up 8.34% from 2024. This was mainly driven by higher costs for personnel, connected to the launch of new tables and studios.
Meanwhile, operating profit amounted to €1.26 billion, down from €1.42 billion the previous year, with an operating margin of 59.4% (down from 64.1%).
Asia returns to growth amid fight against cyberattacks
On the call, Carlesund highlighted the stability and growth potential for North and South American markets, noting they offered “a more stable environment”.
Looking to Asia, he said Evolution had experienced a return to growth in the region during Q4, as work to combat cyber criminality began to pay off. Carlesund said he was not certain when the company would stop being impacted by continuous cyber-attacks, which were first flagged in early 2025.
In its 2024 full-year results, Carlesund said, “Someone is stealing our products”, and as a result earnings in the region suffered in 2024 and throughout 2025.
“The progress is slow, methodical and very important,” Carlesund said of the company’s efforts to fight cybercrime.
Galaxy acquisition is ‘progressing’
Elsewhere, Carlesund responded to questions on the company’s acquisition of Las Vegas-based Galaxy Gaming, a specialist table games and casino technology provider, which it purchased in 2024. The deal has faced delays due to strict requirements from Nevada’s regulator.
On this, the CEO said the deal was “progressing”, but he emphasised the deal was “not large enough to affect its business model”. The update comes amid reports that Evolution’s activity in a number of markets had been flagged by the Nevada regulator as being on their blocked list, including India, which banned online gambling in 2025.
The CEO also addressed a question on whether the supplier could seek out a licence in Russia, should the country legalise online gambling, as was recently suggested by Russia’s Ministry of Finance.
“There are a lot of rumours and Putin says one thing. I would see it as very difficult to apply for a licence there, but let’s see what happens,” Carlesund said on the topic.
Original article: https://igamingbusiness.com/finance/full-year-results/evolution-europe-ringfencing-hits-hard-fy25/
