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Evolution Gaming (EVVTY)
OTHER OTC:EVVTY
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Evolution Gaming Group AB
(OTC:EVVTY)
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Rating:76Outperform
Price Target:
$70.00
▲(3.97% Upside)
Action:ReiteratedDate:02/08/26
The score is driven primarily by strong financial fundamentals (high profitability, low leverage, solid cash generation) and supportive valuation (low P/E and high dividend yield). These positives are tempered by weak technicals (downtrend with negative momentum) and earnings-call risks around Europe/regulation, Live revenue softness, and other external uncertainties.
Positive Factors
High and Stable Margins
Sustained ~66% adjusted EBITDA margins imply structural operating leverage from scalable live-studio tech and content. High margins support persistent free cash generation, fund product/studio investment, and enable sizable shareholder returns even if top-line growth lags.
Conservative Balance Sheet
Extremely low leverage gives the company durable financial flexibility to fund organic growth, complete acquisitions (e.g., Galaxy), withstand regulatory shocks, and maintain buybacks/dividends without stressing liquidity or requiring dilutive financing.
Robust Cash Generation & Returns
High cash conversion and a large cash balance underpin repeatable shareholder returns and fund reinvestment. Strong FCF mitigates earnings volatility, finances studio/product expansion, and preserves strategic optionality over multiple quarters.
Negative Factors
Revenue Deceleration & Live Contraction
A meaningful slowdown in revenue and falling Live receipts signal structural demand pressure in core markets. Persistent top-line weakness undermines scale economics for studios and game investments, raising the bar for margin recovery if growth stays muted.
Regulatory and Litigation Uncertainty
Open probes, litigation and outstanding approvals create multi-quarter revenue and access risk in Europe and other regulated markets. Regulatory constraints can permanently alter channelization, reduce addressable markets, or delay/derail strategic deals like Galaxy.
Rising Operating Costs & Investment Demands
Higher operating expenses and sustained CapEx to add studios and games increase fixed-cost commitments. If revenue recovery lags, margin pressure and cash-flow volatility may persist, limiting the pace of shareholder returns and requiring careful capital allocation.
Evolution Gaming Group AB (EVVTY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.96B
Dividend Yield4.64%
Average Volume (3M)14.22K
Price to Earnings (P/E)9.8
Beta (1Y)0.43
Revenue Growth6.06%
EPS Growth3.19%
CountryUS
Employees16,368
SectorConsumer Cyclical
Sector Strength84
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)1.82
Shares Outstanding204,462,160
10 Day Avg. Volume24,137
30 Day Avg. Volume14,216
Financial Highlights & Ratios
PEG Ratio-0.94
Price to Book (P/B)2.88
Price to Sales (P/S)5.76
P/FCF Ratio10.46
Enterprise Value/Market Cap0.80
Enterprise Value/Revenue4.53
Enterprise Value/Gross Profit4.52
Enterprise Value/Ebitda6.75
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)6.31
Revenue Forecast (FY)$2.53B
Evolution Gaming Group AB Business Overview & Revenue Model
Company DescriptionEvolution 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.
How the Company Makes MoneyEvolution Gaming makes money primarily through its B2B (business-to-business) model by providing live casino solutions to online gambling operators. The company charges its clients a fee based on a revenue share model, where it takes a percentage of the casino's gaming revenue generated from the live dealer games. Additionally, Evolution earns revenue through licensing agreements, where it provides its technology and gaming content for a fixed fee. Significant partnerships with major online gambling operators and platforms enhance its market reach and contribute to its earnings. The company's continued innovation in game development and expansion into new markets also play a crucial role in driving revenue growth.
Evolution Gaming Group AB Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 22, 2026
Earnings Call Sentiment Positive
The call balanced notable operational and financial strengths — maintained high margins within guidance, strong cash generation, large shareholder returns, regional expansion (notably Latin America and North America) and an ambitious product pipeline (exclusive Hasbro deal and >110 games planned) — against several material headwinds: a weak Q4 in Europe driven by regulatory channelization issues, Live revenue decline, cybercrime challenges in Asia, elevated operating expenses and ongoing regulatory and litigation uncertainties. Overall, management presented confidence in operational execution and a path to growth in 2026 while acknowledging unresolved external risks.Q4-2025 Updates
Positive Updates
Strong profitability and margins
Adjusted EBITDA of EUR 341.5m in Q4 with a 66.4% margin; full-year adjusted EBITDA EUR 1,366m (down 3.2% YoY) with a 66.1% margin, which is within the communicated 66–68% guidance. Profit for the period was EUR 306.8m in Q4 and full-year profit was EUR 1.06bn; EPS after dilution EUR 1.54.
Robust cash generation and shareholder returns
Operating cash flow after investments of EUR 262m in Q4 and cash conversion of 82% in Q4. Year-to-date cash balance EUR 818m and bond portfolio EUR 104m. Total shareholder remuneration in 2025 ~EUR 1.1bn (yield 9.3% on year-end market cap); cumulative returns since 2020 >EUR 3.5bn. 2025 buybacks: EUR 500.2m for 7.3m shares (~3.6% of company).
Full-year revenue defended
Net revenues for FY2025 were nearly flat at EUR 2,067m (+0.2% YoY), demonstrating resilience despite regional and operational headwinds.
Regional expansion and growth pockets
North America, Latin America and Africa showed growth; North America and Latin America reported all-time high revenues. Latin America accelerated QoQ and YoY driven by Brazil. Asia returned to modest QoQ growth after mitigation efforts.
Major product pipeline and commercial wins
Headline title Ice Fishing doubled player numbers over the last 3 months; launched new titles including Red Baron. Announced an exclusive worldwide Hasbro partnership for Live and RNG content and a 2026 roadmap of >110 new games (multiple MONOPOLY game shows and RNG titles), providing significant future commercial upside.
Operational KPIs improving and diversification
Headcount up 5.8% YoY and 3.8% QoQ, Game Round Index +1.8% YoY, customer base ~870 (expanded in Brazil), dependency on top-5 customers reduced from 46% to 39% (largest customer ~12%), and +300 tables added during the year — reflecting better resource mix and less client concentration.
Studio footprint and scalability
24 studios globally (new in Brazil, Philippines, Romania, New Jersey) with STAR network connectivity and planned expansion (new Michigan studio), supporting faster market entry and scaling.
Negative Updates
Weakness in Europe and channelization decline
Europe revenues declined both YoY and QoQ; Q4 was materially weaker than Q3 (an unusual seasonal shift). Management cites strict ring-fencing and regulatory measures pushing players to unregulated operators and causing a significant drop in channelization in some countries.
Live revenue contraction
Live revenue declined 4.5% to EUR 438.6m in the quarter, driven by challenges in Europe and Asia despite growth in North America and Latin America.
Top-line unevenness and YoY EBITDA pressure
Although FY revenue was flat (+0.2%), adjusted EBITDA declined 3.2% YoY, reflecting uneven top-line performance and volatility across quarters.
Rising operating expenses and cash-flow volatility
Total operating expenses in the quarter were EUR 215m, up 6.3% YoY and 2.1% QoQ. Q4 operating cash flow after investments was relatively lower (EUR 262m) partly due to seasonally elevated accounts receivable, contributing to greater cash-flow volatility in 2025.
Cybercrime and content-theft issues in Asia
Asia faced content theft and cybercrime challenges that suppressed activity earlier in the year; while there was modest QoQ improvement in Q4, management states mitigation is ongoing with no firm timeline for full resolution.
Regulatory and litigation uncertainties
Ongoing litigation with Playtech (no material update), pending UK Gambling Commission investigation with no new communications, and remaining regulatory approvals required for the Galaxy acquisition (Nevada guidance flagged). Pillar 2 tax and other regulatory uncertainties remain.
CapEx and investment demands
CapEx of EUR 38.5m in Q4 and EUR 134.8m for the year; management indicates continued investment (studios, product) which can put pressure on margins until scale and revenue recovery materialize.
Company Guidance
Management reiterated that 2026 margins are expected to be in line with 2025 (around 66%), noting 2025 delivered a 66.1% adjusted EBITDA margin (adjusted EBITDA EUR1,366m) on net revenues of EUR2,067m and Q4 net revenues of EUR514m with Q4 adjusted EBITDA of EUR341.5m; they reiterated a target to maintain ~66% margin in 2026. Capital allocation decisions will be announced later this quarter (the group returned ~EUR1.1bn to shareholders in 2025 and >EUR3.5bn since 2020 via dividends and buybacks; 2025 buybacks totalled EUR500.2m for 7.3m shares, ~3.6% of shares outstanding, including EUR93.7m for 1.6m shares in Q4). They said CapEx for 2025 was EUR134.8m (Q4 CapEx EUR38.5m) and will provide further CapEx/capital allocation detail at the AGM; cash conversion was 82% in Q4, operating cash flow after investments was EUR262m in Q4, total cash was EUR818m, bond portfolio EUR104m and equity ~EUR4.1bn. The Galaxy acquisition remains on track to close before 17 July, subject to remaining regulatory approvals.Evolution Gaming Group AB Financial Statement Overview
Summary
Overall financial quality is strong: exceptional profitability (net margin still >50% in 2025), very conservative leverage (debt-to-equity ~0.02) with strong ROE, and consistently high free cash flow conversion. The main negatives are a slight 2025 revenue decline, modest margin compression, and mildly softer cash-flow resilience versus 2022–2024.Income Statement
Revenue scaled sharply from 2020–2024, but growth turned slightly negative in 2025 (-2.5%), signaling a near-term slowdown. Profitability remains exceptional, with very high gross and operating margins and net profit margin still above 50% in 2025, though down from 2024 levels. Overall, the income statement is strong on profitability and historical growth, with the main watch item being the recent deceleration and modest margin compression.86
Very Positive
Balance Sheet
The balance sheet is conservatively positioned with very low leverage (debt-to-equity ~0.02 across periods) and a steadily growing equity base. Returns on equity are strong (roughly ~19% to ~31% over the period, ~26% in 2025), indicating efficient capital use. Key risk appears limited on leverage; the primary weakness is that returns have eased from the 2024 peak, suggesting profitability normalization rather than balance-sheet strain.92
Very Positive
Cash Flow
Cash generation is robust: operating cash flow and free cash flow are consistently high relative to reported earnings (free cash flow running at ~89% of net income in 2025, similar to prior years). However, cash flow quality has become a bit less resilient versus earlier years, with operating cash flow only about in line with net income in 2025 (down from stronger coverage in 2022–2024) and free cash flow slightly down in 2025 (-4.4%). Overall, strong cash conversion with a mild recent softening.84
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.03B | 2.06B | 1.80B | 1.46B | 1.07B |
| Gross Profit | 1.21B | 2.11B | 1.80B | 936.13M | 1.09B |
| EBITDA | 1.36B | 1.59B | 1.28B | 1.01B | 730.94M |
| Net Income | 1.06B | 1.24B | 1.07B | 843.36M | 605.43M |
Balance Sheet | |||||
| Total Assets | 5.52B | 5.35B | 4.97B | 4.37B | 3.90B |
| Cash, Cash Equivalents and Short-Term Investments | 817.60M | 787.07M | 985.76M | 532.55M | 421.43M |
| Total Debt | 91.07M | 93.66M | 79.46M | 79.55M | 67.81M |
| Total Liabilities | 1.45B | 1.37B | 967.27M | 909.09M | 712.12M |
| Stockholders Equity | 4.08B | 3.97B | 4.01B | 3.46B | 3.19B |
Cash Flow | |||||
| Free Cash Flow | 1.12B | 1.16B | 1.07B | 780.53M | 537.30M |
| Operating Cash Flow | 1.21B | 1.30B | 1.17B | 877.47M | 598.89M |
| Investing Cash Flow | -139.44M | -247.97M | -139.36M | -371.60M | -154.95M |
| Financing Cash Flow | -1.05B | -1.24B | -574.50M | -394.20M | -248.52M |
Evolution Gaming Group AB Technical Analysis
Negative
67.33
Price Trends
64.86
Negative
67.71
Negative
74.19
Negative
Market Momentum
-1.97
Positive
41.91
Neutral
33.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EVVTY, the sentiment is Negative. The current price of 67.33 is above the 20-day moving average (MA) of 61.69, above the 50-day MA of 64.86, and below the 200-day MA of 74.19, indicating a bearish trend. The MACD of -1.97 indicates Positive momentum. The RSI at 41.91 is Neutral, neither overbought nor oversold. The STOCH value of 33.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EVVTY.
Evolution Gaming Group AB Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $11.96B | 9.85 | 27.00% | 4.64% | 6.06% | 3.19% | |
69 Neutral | $216.49M | 4.12 | ― | ― | 4.03% | ― | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | $149.89M | 70.69 | 1.46% | ― | 24.21% | -92.49% | |
56 Neutral | $363.99M | 69.11 | 23.16% | ― | 1.79% | ― | |
47 Neutral | $1.69B | -1.98 | -35.97% | ― | 8.24% | -77.54% |
* Consumer Cyclical Sector Average
EVVTY
Evolution Gaming Group AB
61.39
-12.30
-16.69%
PENN
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14.64
-5.75
-28.20%
INSE
Inspired Entertainment
8.35
-2.42
-22.47%
CDRO
Codere Online
8.11
0.48
6.29%
GAMB
Gambling.com
4.33
-9.87
-69.51%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.