Evolution AB (publ)

Welcome to Evolution Q3 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.

Good morning, everyone. Welcome to the presentation of Evolutions Interim Report for the third quarter of 2026. My name is Martin Karlshund and I'm the CEO of Evolution. With me, I have our CFO Joachim Andersson, as usual. I will start with some comments on our performance and then hand over to Joachim for a closer look at our financials. After that, I will conclude and then we will open up for questions. Next slide, please. Let's start with the highlights. Net revenues were Euro 526.1 million corresponding to year-on-year increase of 3.7% and a quarter-on-quarter increase of 1.6%. Adjusted EBDA came in at 345.9 million, giving a margin of 65.8%. Adjustments include the UK Gaming Commission settlement of 5.6 million and the Galaxy Gaming termination fee of 6.5 million. This was an uneventful quarter, which I believe is something good. On a quarter on quarter basis, all regions contributed to growth for the first time since 2024. The margin remains stable and very strong cash flow. Live revenues increased by 1.3% compared to the second quarter and by 2.6% on year-on-year basis. R&G reported double-digit growth for the second quarter in a row, up 10.1% compared to last year and 3.2% compared to the second quarter. Nothing spectacular happened on the operational side. It's business as usual with several game releases. new students openings and our everlasting creative becoming a little bit better every day. After the end of the quarter, the new potentially temporary ban on gaming came into force in Brazil, as you know. That will make Q4 not as uneventful, but we don't want to speculate about the final outcome. We would like to know more. We will know more of the second round of the election this weekend. For now we have closed the studio, but we're ready to reopen on short notice. It's highly unfortunate that a populistic agenda can overthrow a regulatory framework that has only been in place for one and a half year. However, evolution has the advantage of our global scale and size, and it's not the first time we had to handle the regulatory fickleness of the market. We now focus on how to handle our employees and the practical consequences as we wait for further clarity. Next slide, please. Let's look at our operational KPIs, first consisting of headcount and then game rounds. Headcount increased by 8.1% on the year-on-year basics and 2.3% compared to the second quarter. We launched one more studio in the quarter, our third in total this year, and our 27th studio worldwide. We continue to optimize the distribution and cost mix. The Game Rounds Index can be seen as a general indicator of activity throughout our network over time. We've seen a steady increase over the past quarters and somewhat of a jump in Q3. Next slide, please. Looking at the revenue mix by customer location, Europe has decreased slightly, while Latam and Asia have increased compared to Q2. As a reminder, as we require all our customers to carry a license in a regulated jurisdiction, all our revenues are regulated. The revenue split on our customers which is an estimation based on the IP number of players received from our customers and purchase third party geo information has not changed compared to Q2. The same goes for the estimated share of revenue from regulated markets, which remains at 49%. Next slide, please. Now I will go through each of the major regions based on the estimation of revenue based on our customers' customers' IP number. Europe reported quarter-on-quarter growth of 0.4% and a year-on-year decrease of 4.7%. It's not exciting, and we should do better. No matter the regulatory situation or low channelization rates, we should do better. Demand for localized content remains high, and we launched an Italian language ice fishing during the quarter. We also opened a second studio in Lithuania. Asia increased by 0.8% quarter on quarter and by 1.6% year on year. It's one small step forward compared to Q2, but you all know that there is no quick solution to the cyber crime issues that we continue to see. We are playing the long game and I remain confident that it will pay off. Next slide, please. Yet again, we achieved all-time high revenues in both North America and Latin, but now also in Africa. North America reported 13.6% year-on-year growth. Slots continue to be the dominating game type, and our R&D portfolio performs better. At the same time, live is slowly finding its audience, and we continue to expand to meet demand. Earlier this year, we opened our second studio in Michigan, and during the fourth quarter we will open a fourth studio in New Jersey that also will serve Delaware. We then have a total of eight operative hubs in the US. Latam reported 23.1% year-on-year growth and it didn't include any effects from the ban in Brazil that came into force early October. If Brazil reopens its market, we are ready to accelerate. In the meantime, we're planning for further expansion in Colombia while also building momentum in Argentina with our two studios there. Africa and other continued its strong performance with a 23.7% year-on-year growth.

Next slide, please.