On $EVO’s results and a few more thoughts

Overall, the results aren’t good. But they’re not as bad as they look at first glance either. The environment is tough, and the company is holding up with quite a bit of resilience. The real risk isn’t what’s happened, but how long this environment can last.

1️⃣ Europe, Asia and the growth map

Europe and Asia, which are still its two main markets, are struggling.

Europe has been overregulated, pushing many players into the black market, where Evolution doesn’t operate. Asia is still affected by cyberattacks.

The US, on the other hand, is progressing well and looks set to be the next major growth driver, although it still makes up a small part of the total.

Even so, and this is important, growth would have been positive without the negative impact from currencies. Given the circumstances, that’s pretty constructive.

2️⃣ Interesting signals in the presentation

There were two details that especially caught my attention.

First, the greater segment breakdown. The company is becoming more transparent.

Second, they deliberately avoided talking about capital allocation.

This could mean one of two things. Either buybacks will finally be bigger this year, or they want to agree on the decision with Kenneth Dart before making a move. Either way, it’s not a minor detail.

3️⃣ 2026 pipeline: focusing where it hurts the competition most

The 2026 pipeline looks very strong. The new games announced reinforce exactly the segments where Evolution has the biggest edge in Live: game shows and games with IP, especially the collaboration with Hasbro.

That’s where its competitive advantage is clearest and where future growth could accelerate. Contrary to what many might think, the company is still prioritizing growth over squeezing margins, which are still very high anyway.

4️⃣ RNG stops being a problem

Their position in RNG is probably the best it’s ever been.

NoLimit, NetEnt and Sneaky Slots are well positioned, and everything points to them continuing to drive segment growth over the next few years.

RNG is going from a structural drag to a real asset within the group.

5️⃣ Galaxy Gaming: it probably won’t go through

As for the Galaxy Gaming acquisition, it probably won’t close. The current market spread is huge, and it makes sense. Everything suggests the regulator won’t approve the deal because of some sensitive markets where Evolution still operates.

The company doesn’t seem especially concerned, and it feels like they’re comfortable letting the deal fall through if necessary.

6️⃣ An important competitive point

Beyond these results, there’s something worth keeping in mind. Competition looks pretty ugly in the more basic Live games. Operators have little incentive to choose Evolution over a cheaper provider.

The only things really protecting Evo here are its distribution and reputation.

📑 Conclusions

→ Operationally, the medium-term growth outlook isn’t bad. The problem is the industry environment. If it gets worse, Evolution will suffer. If it improves, we could see some very interesting things.

→ Many of the negatives investors have criticized over the past few years seem to be easing: unregulated markets, capital allocation, RNG. All of that is improving just as the macro and sector environment are getting much worse.

The macro isn’t helping, but I’m still invested because the company is executing very well and weathering the hit, while shareholders are collecting around a 10% annual yield. It’s not impossible that we’re close to peak pessimism.

Whether it goes well or badly, Evolution is going to be a case study.

Either a lesson in why you shouldn’t sell quality companies because of temporary problems.

Or a lesson in why you need to sell quickly when the environment really changes.

Right now, the trade is clear.

Either you collect a 10% annual yield and learn something for the future.
Or you’re right and the return could be much higher.