Evolution AB (publ)

Welcome to Evolution Q2 Report 2026 presentation. During the Q&A session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to the speakers, CEO Martin Carleson and CFO Joachim Andersen. Please go ahead.

Thank you. Good morning, everyone. Welcome to the presentation of Evolution's Interim Report for the second quarter of 2026. My name is Martin Karlsson and I'm the CEO of Evolution. With me, I have our CFO Joakim Andersson. As always, I will start with some comments on our performance and then hand over to Joakim for a closer look at our financials. After that, I will conclude and then we will open up for questions. Next slide, please. So let's start with the highlights. Net revenues were Euro 517.8 million, corresponding to year-on-year decline of 1.2%, but a quarter-on-quarter increase of 0.9%. EBITDA came in at 341 million, corresponding to a margin of 65.9%. I'm overall happy with the results in the quarter. Revenue and EBITDA both move in the right direction. The margin is in line with our guidance and cash flow is strong. The volatility in Asia continues to disturb the overall picture, but we will continue to address the cybercrime challenges day by day, one quarter at a time, and I'm certain that we will eventually win. Europe saw recovery compared to the start of the year, with generally good progress across markets. Latin America continues its strong momentum, and North America also shows good growth. Live revenue improved with 0.6% compared to the first quarter, but declined 3.6% on a year-on-year basis, mostly related to Europe. At the same time, R&G revenue showed a strong 14% growth year-on-year, and it can be noted that the North American slots business performs well at the moment. In the quarter, we've launched a second studio in Michigan, which is not only hosting several game shows in the state, but also is the home of our second live brand, Azubi. And around the quarter end, we also relaunched a studio in Argentina that we acquired from a competitor earlier this year. On the product side, we have launched the first titles under our new Hasbro partnership. So all in all, pretty much business as usual. We keep grinding and moving forward. Next slide, please. Here we have our operational KPIs, first consisting of headcount and the gain rounds index. On headcount, we are growing 2.8% on a year-on-year basis and flat quarter-on-quarter. As highlighted, we have launched two new studios in the quarter and are set for yet some more launches late this year. With every new studio, we are optimizing the distribution and cost mix, and I'm happy with that. The game rounds index can be seen as a general indicator of activity throughout our network over time. It varies between quarters, but for the long-term trend, it should be increased. A session in general gets faster with small bets. The uptick in Q2 is satisfying. Very good. Next slide, please. Looking at the revenue mix by customer location, it looks exactly the same as in Q1. Europe dominates the picture, followed by North America and Latin America. As we require all our customers to carry licenses in regulated jurisdictions, all our revenues are regulated. Moving to the revenue split based on our customer's customer, which is an estimation based on the IP number of players received from our customers and purchased third-party information. North America and Africa takes a slightly larger part of the mix, whereas Asia has decreased somewhat. The estimated share of stemming from regulated markets continue to increase and now stands at 49%. Next slide, please. Now I'll go through each of the major regions based on the estimation of revenue based on our customers' IP numbers. Europe saw a recovery quarter on quarter. The regulatory subjectivity remains and generalization is very weak in a number of jurisdictions, but we have seen an increasing activity in regulated markets. Are we at an inflection point? It's too early to say, but our strong belief is that the only way to win players to the regulated portion of the market is both a balanced regulation and by offering the best and most entertaining content. In the quarter, the game show category did really good, and demand for localized content is on the rise. We continue to work hard and adapt to both the regulatory and the player needs. Later this year, we will launch a new studio in Vilnius in Lithuania. A recurring topic when speaking about Europe has been the license review in the UK, where we agreed a settlement of 4.75 million pounds earlier this week. I believe the amount is a bit high in relation to the actual issue, but I'm still happy to be able to resolve it and move forward. Throughout the review, we have continued to refine our processes and as you are well aware of, also imposed the strictest ring fencing measures among any suppliers in Europe. I can't stress this enough, at Evolution we always want to do right, we require all our customers to carry the license needed in a specific market, and we engage with the regulators to address any issues that arise. Moving to Asia, as already highlighted, unfortunately we took a step back compared to the previous quarter, We have said it before that this is a cat and mouse game and the volatility will remain. But we are not stressed. We know what the challenge is. We will continue to battle it and we look forward to see where we stand in the next quarter. Looking beyond the cybercrime issues, performance in the region was good. The regulated Filipino market is growing nicely and the regulatory situation in the region as a whole has been overall stable.

Next slide, please.