Evolution Reports Slower Q1 2025 as Strategic Shifts Impact Profitability
Evolution has entered 2025 with modest growth and noticeable pressure on profits, as the company focuses on regulatory compliance and long-term planning. While revenues grew slightly, earnings dropped, reflecting ongoing challenges in some markets and deliberate internal changes aimed at future stability.
Revenue edges up, profits decline
For the first quarter of 2025, Evolution reported €520.9 million in revenue, marking a 3.9% increase compared to Q1 2024. However, the company’s earnings before major costs (EBITDA) dipped slightly to €342.0 million, and net profit fell to €254.7 million, down from €269.2 million a year earlier. Earnings per share also declined to €1.24 from €1.27.
The drop in profits was not unexpected. According to CEO Martin Carlesund, Evolution’s financials reflect strategic choices, such as pulling back from loosely regulated markets and dealing with cybersecurity threats in Asia. These decisions impacted short-term growth but are seen as necessary for the company’s long-term success.
Regulation takes priority
A key theme this quarter was Evolution’s intensified focus on compliance. The company took self-initiated steps to limit exposure in certain European markets, even where regulation is still developing. This caused a short-term hit to revenue, especially in areas where local player migration to licensed operators remains low.
Carlesund acknowledged the impact, saying profitability in Q1 was “on the low side,” but insisted that aligning with regulation remains a priority. Evolution believes these measures will create a stronger foundation moving forward, especially as more countries adopt formal licensing frameworks.
Investment in growth continues
Despite the financial dip, Evolution remains committed to growth. The company launched two new studios in Q1 – one in Romania and another in New Jersey – and plans to open several more this year, including in Brazil, the Philippines, and Michigan.
The company also initiated a share buyback program, repurchasing over 2.1 million shares during the quarter, a move that signals confidence in its long-term value despite short-term turbulence.
Product roadmap full, results mixed
Evolution unveiled 17 new games in the first quarter and plans over 110 new releases for 2025. Notable launches include Duck Hunters from Nolimit City and the live game shows Race Track and War. Upcoming titles such as Marble Race and Ice Fishing are expected to strengthen the lineup further.
Still, RNG growth remained modest at 3%, and live casino expanded just 4% year-on-year – lower than usual for the company. Evolution attributes this to both market-specific challenges and internal restructuring.
What’s Next for Evolution
A strike at the company’s studio in Georgia last year led to an independent investigation, now completed by one of the Big Four accounting firms. The report supported Evolution’s prior claims and concluded the company had acted appropriately. Evolution has since closed the chapter on the matter.
While the first quarter didn’t meet internal expectations, Evolution is sticking to its full-year EBITDA margin forecast of 66–68%. The company believes the groundwork laid early this year will lead to stronger results in the second half.
CEO of Evolution, Martin Carlesund summed it up by saying:
“I am not happy with the financial development in the quarter, but one must take into account that the results are impacted by necessary steps that contribute to our mission to ever increase the gap to competition. It takes hard work in all areas; staying ahead in the ever-changing regulatory landscape, being an attractive employer around the globe, moving our technology to the cutting edge and offering the best product in the world. The road cannot always be straight, but what is crucial is that we learn from the challenges we face and relentlessly adapt and strive to make Evolution a little bit better every day.”