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1. Company Snapshot

1.a. Company Description

Evolution AB (publ) develops, produces, markets, and licenses live casino and slots solutions to gaming operators primarily in Europe and the United States.The company runs the game from a casino gaming table, which is streamed in real time and end users make betting decisions on their devices, such as computers, smartphones, tablets, etc.Its portfolio of online live table games primarily includes Live Roulette, Blackjack, Baccarat, Super Sic Bo, Dragon Tiger, Craps, Live Casino Hold'em, Three Card Poker, and Ultimate Texas Hold'em; and operates approximately 1000 tables.


The company was formerly known as Evolution Gaming Group AB (publ).Evolution AB (publ) was founded in 2006 and is headquartered in Stockholm, Sweden.

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1.b. Last Insights on EVO

Evolution AB (publ) faced challenges due to increasing regulatory scrutiny and market concerns. The company's recent performance was impacted by a lack of significant growth drivers, with some investors expressing caution. There were no major product launches or acquisitions announced during this period. Evolution's valuation has come under question, with some analysts reevaluating their stance. The company's recent earnings release did not provide significant positive surprises, contributing to investor unease. Regulatory headwinds and intense competition in the market have added to the pressure.

1.c. Company Highlights

2. Evolution's Q4 2025 Earnings: A Resilient Performance

Evolution reported a net revenue of EUR 540 million in Q4 2025, representing a 1.4% quarter-on-quarter growth, but a 3.7% year-on-year decline. The adjusted EBITDA margin stood at 66.4%, with an adjusted EBITDA of EUR 341.5 million. Earnings per share (EPS) came in at EUR 16.7, beating analyst estimates of EUR 14.31. The company's cash conversion remained solid at 82% for the fourth quarter. "Operationally, it was a good quarter and year, maybe the best ever," as stated by Martin Carlesund, highlighting the company's increased efficiency and maintained margin.

Publication Date: Feb -06

📋 Highlights
  • Q4 Net Revenue Growth:: EUR 540 million, 1.4% quarter-on-quarter (QoQ) increase but 3.7% year-on-year (YoY) decline.
  • Adjusted EBITDA Margin Stability:: 66.4% margin in Q4 with EUR 341.5 million EBITDA, maintaining resilience despite cost pressures.
  • Regional Performance:: LatAm, North America, and Africa grew, while Europe declined YoY/QoQ, attributed to regulatory and market instability.
  • Cash Flow and Buybacks:: EUR 262 million operating cash flow after investments, EUR 500.2 million spent on share buybacks in 2025 (3.6% of shares).
  • Product Launch Momentum:: Ezugi brand expansion in New Jersey and new game Red Baron drove player numbers and product diversification efforts.

Regional Performance

The company's regional performance was mixed, with Asia returning to modest growth, while Latin America, North America, and Africa showed growth. Europe, however, declined both on a year-on-year and quarter-on-quarter basis, attributed to regulatory measures and market instability. The live revenue declined by 4.5% to EUR 438.6 million.

Financial Strength

Evolution's financial strength is evident in its total cash balance of EUR 818 million and an equity position of almost EUR 4.1 billion at the end of the year. The company continued with buybacks in the fourth quarter, investing EUR 93.7 million and buying back 1.6 million shares. The bond portfolio stood at EUR 104 million, further reinforcing the company's financial stability.

Valuation Metrics

With a P/E Ratio of 8.94 and an EV/EBITDA of 6.37, the company's valuation appears reasonable. The ROE stood at 28.84%, indicating strong profitability. The Dividend Yield is 5.84%, making it an attractive proposition for income-seeking investors. Analysts estimate next year's revenue growth at 7.8%, which may lead to a re-rating of the stock.

Outlook

Looking ahead to 2026, Evolution expects to deliver a robust product roadmap, with expansion at full speed in the U.S. and Latin America, while maintaining a margin in line with 2025. The company's focus on operational efficiency and its strong financial position are expected to drive growth and returns for shareholders.

3. NewsRoom

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Evaluating Evolution (OM:EVO): Is the Current Valuation Justified After Recent Share Price Fluctuations?

Sep -08

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What Does Evolution’s 15% Slide Mean for Its 2025 Valuation?

Aug -25

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European Dividend Stocks To Consider For Your Portfolio

Jul -18

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Evolution (OM:EVO) Announces €346M Share Buyback

Jun -17

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European Dividend Stocks To Enhance Your Portfolio

Jun -13

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Evolution (OM:EVO) Partners With Caesars Entertainment for New Live Dealer Venue in New Jersey

Apr -02

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Evolution enters Delaware through Rush Street Interactive

Mar -28

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Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against B. Riley, Evolution, NYCB, and LuxUrban and Encourages Investors to Contact the Firm

Mar -06

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (15.50%)

6. Segments

Provision of Solutions for Live Casino and Associated Services

Expected Growth: 15.5%

Evolution AB's growth is driven by increasing demand for live casino services, expansion into new markets, and continuous innovation in gaming products and technology.

7. Detailed Products

Live Casino

Evolution's Live Casino offers a range of live dealer games, including roulette, blackjack, and baccarat, providing an immersive and interactive gaming experience for players.

Random Number Generator (RNG) Games

Evolution's RNG Games provide a suite of online casino games, including slots, table games, and instant wins, offering a diverse range of themes and gameplay styles.

Game Shows

Evolution's Game Shows offer a unique blend of live dealer games and game show-style entertainment, featuring popular titles like Monopoly Live and Deal or No Deal Live.

First Person Games

Evolution's First Person Games provide a range of RNG-based games, including roulette, blackjack, and baccarat, offering a unique and immersive gaming experience.

Dual Play

Evolution's Dual Play allows land-based casinos to integrate their live games with online players, creating a converged gaming experience.

8. Evolution AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Porter Forces of Evolution AB (publ) is medium due to the presence of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers for Porter Forces of Evolution AB (publ) is high due to the concentration of customers and their ability to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Porter Forces of Evolution AB (publ) is low due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants for Porter Forces of Evolution AB (publ) is medium due to the presence of barriers to entry and the company's established market position.

Intensity Of Rivalry

The intensity of rivalry for Porter Forces of Evolution AB (publ) is high due to the presence of several competitors and the company's need to differentiate itself.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 1.94%
Debt Cost 6.76%
Equity Weight 98.06%
Equity Cost 9.24%
WACC 9.20%
Leverage 1.98%

11. Quality Control: Evolution AB (publ) passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Mercedes-Benz

A-Score: 6.7/10

Value: 8.7

Growth: 4.9

Quality: 3.3

Yield: 10.0

Momentum: 6.0

Volatility: 7.3

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VW

A-Score: 6.3/10

Value: 9.8

Growth: 3.4

Quality: 2.1

Yield: 9.4

Momentum: 6.5

Volatility: 6.7

1-Year Total Return ->

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Evolution

A-Score: 5.9/10

Value: 5.4

Growth: 9.4

Quality: 9.5

Yield: 5.6

Momentum: 1.0

Volatility: 4.7

1-Year Total Return ->

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BMW

A-Score: 5.9/10

Value: 7.2

Growth: 5.6

Quality: 2.6

Yield: 8.1

Momentum: 6.5

Volatility: 5.7

1-Year Total Return ->

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Michelin

A-Score: 5.9/10

Value: 6.0

Growth: 4.6

Quality: 4.7

Yield: 8.8

Momentum: 3.0

Volatility: 8.3

1-Year Total Return ->

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Flutter

A-Score: 2.8/10

Value: 3.4

Growth: 6.0

Quality: 2.0

Yield: 0.0

Momentum: 1.5

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

526.4$

Current Price

526.4$

Potential

-0.00%

Expected Cash-Flows