Evolution Gaming Q4 2025 Evolution Gaming Group AB Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Evolution Gaming Group AB Earnings Call
Speaker #1: Your line is muted. arrives. Call recording is on. Welcome to Evolution Q4 report 2025 presentation. During the Q&A session, participants are able to ask questions by dialing #Q5 on their telephone keypad.
Operator: Welcome to Evolution Q4 Report 2025 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 Carlesund and CFO Joakim Andersson. Please go ahead.
Speaker #1: Carlesund and CFO Joakim the speakers CEO Martin Andersson. Please go Now, I will hand the conference over to ahead.
Speaker #2: Good morning, everyone. Welcome to the presentation of Evolution's year-end report for 2025. My name is Martin Carlesund, and I'm the CEO of Evolution. With me, I have our CFO, Joakim Andersson.
Martin Carlesund: Good morning, everyone. Welcome to the presentation of Evolution's year-end report for 2025. My name is Martin Carlesund, 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 with an outlook, and then we'll open up for questions. Next slide, please. So let's start with the financial and operational highlights in the quarter. Overall, we saw somewhat better performance in Q4 compared to Q3. The net revenues came in at EUR 514 million, corresponding to quarter-on-quarter growth of 1.4%, but a year-on-year decline of 3.7%. Adjusted EBITDA amounted to EUR 341.5 million, giving a margin of 66.4%.
Speaker #2: 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 with an outlook questions.
Speaker #2: and then we'll open up for Next slide, please. So let's start with the financial and operational highlights in the quarter. Overall, we saw somewhat better performance in Q4 compared to Q3.
Speaker #2: The net revenues came in at €514 million, corresponding to quarter-on-quarter growth of 1.4%, but a year-on-year decline of 3.7%. Adjusted EBITDA amounted to €341.5 million, giving a margin of 66.4%.
Speaker #2: Asia turned back to modest growth, quarter-on-quarter, signaling some progress in our hard work to battle the cybercriminality in the region. As pointed out several times before, there is no quick fix to these issues.
Martin Carlesund: Asia turned back to modest growth quarter-over-quarter, signaling some progress in our hard work to battle the cyber criminality in the region. As pointed out several times before, there is no quick fix to these issues, and we constantly adapt and develop our technical solutions to win in the long run. We believe that it's harder to steal our content today than it was a year ago. Latin America, North America, and Africa also showed growth, whereas Europe declined both on a year-on-year and quarter-over-quarter basis. Our live revenue declined by 4.5% to EUR 438.6 million, while RNG increased by 1.7% to EUR 75.7 million. I believe our slot brands have great potential ahead.
Speaker #2: We constantly adapt and develop our technical solutions to win in the long run. We believe that it's harder to steal our content today than it was a year ago.
Speaker #2: Latin America, North America, and Africa also showed growth, whereas Europe declined both on a year-on-year and quarter-on-quarter basis. Our live revenue declined by 4.5% to €438.6 million, while R&G increased by 1.7% to €75.7 million.
Speaker #2: I believe our slot brands have great potential ahead. Live is currently affected by both Europe and Asia, while North America and Latin America continue to do well.
Martin Carlesund: Live is currently affected by both Europe and Asia, while North America and Latin America continue to do well. In the US, we believe live will continue to grow its share of the total online market, and in the quarter, we launched Ezugi as the second brand in New Jersey. Talking more about games, our headline title for 2025, Ice Fishing, is gaining in popularity following its launch this summer. More and more players enjoy the fast pace and highly entertaining format. We have actually seen a doubling over the last three months. It's trending on social media, and at times, it has been close to player numbers that we've seen in Crazy Time. Amazing. Speaking about speed, the quarter also saw the launch of Red Baron, our third crash game that is simple and fun, both for veterans and beginners.
Speaker #2: will continue to grow its share of the In the US, we believe live total online market, and in the quarter, we launched the Sugi as the second brand in New Jersey.
Speaker #2: Talking more about games: our headline title for 2025, Ice Fishing, is gaining in popularity, following its launch this summer. More and more players enjoy the fast-paced and highly entertaining format.
Speaker #2: We have actually seen a doubling over the last three months. It's trending on social media, and at times, it has been close to player numbers that we've seen in crazy time.
Speaker #2: Amazing. And speaking about speed, the quarter also saw the launch of Red Baron, fun. Both our third crash game that is simple and for veterans and beginners.
Martin Carlesund: Operators and players love it, and the numbers are steadily increasing. Since this year, this is an on-year format of report, let us also quickly zoom out and look at finances for the full year. Net revenues were almost flat, with an increase of 0.2% to EUR 2,067 million. Adjusted EBITDA decreased by 3.2% to EUR 1,366 million, giving a margin of 66.1%, which is just within the communicated range of 66% to 68% for the year. To conclude the slide, looking at both the quarter and full year, operationally, I believe we did great. The financial outcome could have been better, but given the many challenges we have faced, we still managed to defend our revenue and deliver a solid margin together with a very strong cash flow.
Speaker #2: Operators and players love it, and the numbers are steadily increasing. Since this year, this is an end-year format of report. Let us also quickly zoom out and look at finances for the full year.
Speaker #2: Net revenues were almost flat, with an increase of 0.2% to €2,067 million. Adjusted EBITDA decreased by 3.2% to €1,366 million, giving a margin of 66.1%, which is just within the communicated range of 66% to 68% for the year.
Speaker #2: year, operationally, I believe we did To conclude the great. The financial outcome could have been better, but given the many challenges we have faced, we still managed to defend our revenue and deliver solid margins together with a very strong better, and we look forward to continuing our hard work in 2026.
Speaker #2: Cash flow. We always want to do, despite what happens around us, it's vital that we stay ahead of the game and increase the gap to competition through expansion and innovation.
Martin Carlesund: We always want to do better, and we look forward to continue our hard work in 2026. Despite what happens around us, it's vital that we stay ahead of the game and increase the gap to competition through expansion and innovation. I'm fully convinced that we have succeeded in that 2025, and even more convinced that we will do it also in 2026. Two weeks ago, we turned at ICE in Barcelona, and our Roadmap for the year is breathtaking. I will get back to that later. Next slide, please. We then move on to our operational KPIs, first consisting of headcount and Game Round Index. On headcount, we are growing by 5.8% on year-on-year basis and 3.8% on quarter-on-quarter, and we now see a better, more cost-effective distribution of all deliveries.
Speaker #2: I'm fully convinced that we have succeeded in that in 2025, and even more convinced that we will do it also in 2026. Two weeks ago, we attended ICE in Barcelona, and our roadmap for the year is breathtaking.
Speaker #2: I will get back to that later. Next slide, please. If we then move on to our operational KPIs, first consisting of headcount and game round index.
Speaker #2: headcount, we are growing by On 5.8% on a year-on-year basis and 3.8% on a quarter-on-quarter. And we now see the better, more cost-effective distribution of all delivery.
Martin Carlesund: The game round index can be seen as a general indicator of activity throughout our network over time. For an individual quarter, it can vary a lot and does not always correlate with the revenue development. In the second half of the year, activity went down, somewhat connected to our measures in both Europe and Asia. But if you look at 2025 versus 2024, we actually saw a slight uptick of 1.8% for the full year. Next slide, please. As this is the end-of-year report, we also have the yearly KPIs on the customer dependency and number of tables within Live. Currently, we have about 870 customers, a number that has gone up during the year, mostly linked to the new relationships and operators in Brazil.
Speaker #2: Round index can be seen as the general indicator of activity throughout our network over time. For an individual quarter, it can vary a lot, and thus not always correlate with the revenue development.
Speaker #2: In the second half of the year, activity went down somewhat, connected to our measures in both Europe and Asia. But if you look at 2025 versus 2024, we actually saw a slight uptick of 1.8% for the full year.
Speaker #2: Next slide, please. As this year is the end-of-year report, we also have yearly KPIs. On the customer dependency and number of tables within live.
Speaker #2: Currently, we have about 870 customers, and that number has gone up during the year, mostly linked to new relationships and operators in Brazil.
Speaker #2: We have decreased the dependency on the five largest customers from 46% of revenues in 2024 to 39% in 2025. The largest customer represents about 12% of revenues.
Martin Carlesund: We have decreased the dependency on the five largest customers from 46% revenues in 2024 to 39% in 2025. The largest customer represents about 12% of revenues. The number of tables have increased by 300 during the year, linked to new studio openings in Brazil, the Philippines, Romania, and the US. The resource mix have been improving during 2025, and we look forward to further improvement in 2026, and also better supply to market. We will continue to expand in 2026, among else, with a new studio in Michigan. Next slide, please. In this report, we're introducing a real breakdown of our revenues based on our customers' location. The absolute majority of our customers is based in Europe, followed by North America and Latin America.
Speaker #2: The number of tables has increased by 300 during the year, linked to new studio openings in Brazil, the Philippines, Romania, and the US. The resource mix has been improving during 2025, and we look forward to further improvements in 2026.
Speaker #2: supply-to-market. We will continue to expand in And also a better 2026, among else with a new studio in Michigan. Next slide, please. In this report, we are introducing a real breakdown of our revenues based on our customers' location.
Speaker #2: The absolute majority of our customers is based in Europe, followed by North America and Latin America. All of our revenue is regulated as a basic requirement to become a customer with Evolution is to hold a license from an approved regulator.
Martin Carlesund: All of our revenue is regulated, as a basic requirement to become a customer with Evolution is to hold a license from an approved regulator. You also see revenue split based on our customers and their players, our customer's customer, which is an estimation based on the IP number of players received from our customers. This is the breakdown of revenue we have included in historic reports. Connected to our customers' players' IP addresses, about 47% of the revenue estimate is regulated. Next slide, please. I will now give a few comments on each of the major regions based on the estimation of revenue, based on our customers', customers' IP number. As highlighted in the beginning, Europe declined quarter-on-quarter.
Speaker #2: You also see revenue split based on our customers and their players. Our customers' customers, which is an estimation based on the IP number of players received from our revenue, we have included in historic customers.
Speaker #2: This is the breakdown of reports connected to our customers, 47% of the revenue estimate, players’ IP addresses, about is regulated. Next slide, please. I will now give a few comments on each of the major regions, based on the estimation of revenue based on our customers' customers' IP number.
Speaker #2: As highlighted in the beginning, Europe declined currently quarter-on-quarter. Strongest, most strict—we believe that we have ring-fencing measures among all providers in Europe, and in some markets, we see that players turn to unlicensed operators instead of the official channel, and instead of the regulated, and the channelization declined significantly.
Martin Carlesund: We believe that we currently have the strongest, most strict, ring-fencing measures among all providers in Europe, and in some markets, we see that players turn to unlicensed operators instead of the official channel, and instead of the regulator, and the channelization declined significantly. The current challenge is not the actual ring-fencing, but instead, the channelization decline. In some major countries, as a result of regulatory measures, simply put, the players are, by the regulation, pushed out of the regulated remit and are, to a larger extent, playing on unregulated operators that we don't accept. This is bad for the industry and pushing out the most vulnerable players, but long term, we believe that the regulatory scale will find its balance again.
Speaker #2: The current challenge is not the actual ring-fencing, but instead the channelization decline. In some major countries, as a result of regulatory measures, simply put, the players are, by the regulation, pushed out of the regulated remit and are to a larger extent playing on unregulated operators that we don't accept.
Speaker #2: This is bad for the industry and is pushing out the most vulnerable players. But long term, we believe that the regulatory scale will find its balance again.
Speaker #2: If looking beyond short-term performance, we see that players shift more and more towards game shows, and with the best roadmap ever in 2026, aiming at exactly these types of entertaining games.
Martin Carlesund: If looking beyond short-term performance, we see that players shift more and more towards game shows, and with the best roadmap ever in 2026, aiming at exactly these type of entertaining games, rocket-fueled by Hasbro brands, I really look forward to the development in 2026. Speaking about Europe, we can note that we haven't heard anything from UK Gambling Commission since last summer in relation to the, their investigation. We don't know when they will come back, but have been very cooperative, and as already stated, have very strict ring-fencing measures in place since very early last year. For Asia, I've already said that we have made some progress in the cybercrime mitigation. The overall regulatory dynamics continue to be somewhat challenging, but at the same time, we see good development in the Philippines, where the regulatory framework is getting more stable. Next slide, please.
Speaker #2: Rocket fueled by Hasbro brands, I really look forward to the development in 2026. Speaking about Europe, we can note that we haven't heard anything from the UK Gaming Commission since last summer in relation to their investigation.
Speaker #2: We don't know when they will come back, but there have been very strict ring-fencing measures in place since very early last year. For Asia, I've already said that we have made some progress in the cybercrime mitigation.
Speaker #2: The overall regulatory dynamics continue to be somewhat challenging. But at Philippines, where the regulatory framework is getting more the same time, we see good development in the stable.
Speaker #2: Next slide, please. North America and Latin America both reported all-time highs in terms of revenues. Growth-wise, North America has been somewhat modest during the year, and the regulation pace is very slow, if looking at the US as a whole.
Martin Carlesund: North America and Latin America both reported all-time high in terms of revenues. Growth-wise, North America has been somewhat modest during the year, and the regulation pace is very slow, looking at the US as a whole. But after year-end, we saw some positive development with an iGaming legislation that was passed in May. The potential in existing markets also remains strong, as Live Casino share has a lot of potential. I already mentioned that the launch of Ezugi as our second live brand, initially in New Jersey. Speaking about US, we are still working to get the necessary regulatory approvals to complete the acquisition of Galaxy. Only two states remain, where Nevada is one. Nevada recently announced a guideline for licenses that operate in online gaming in other jurisdictions, and I have seen some speculation that this may cause an issue for us to get the approvals.
Speaker #2: But after year-end, we saw some positive development with an iGaming legislation that was passed in May. The potential in existing markets also remains strong.
Speaker #2: As live casino share has a lot of potential, I already mentioned the launch of SUGI as our second live brand, initially in New Jersey.
Speaker #2: Speaking about US, we are still working to get the of Galaxy. Only necessary regulatory approvals to complete acquisition two states remain where Nevada is one.
Speaker #2: Nevada recently announced a guideline for licenses that operate in online gaming in other jurisdictions. And I have seen some for us to get the approvals.
Speaker #2: There is some speculation that this may cause an issue. The process is moving forward, and we are still within the timeline of closing before July 17th, and I have no further comments at this time. In Latin America, growth continued to accelerate, both year-on-year and quarter-on-quarter.
Martin Carlesund: The process is moving forward, and we are still within the timeline of closing before 17 July, and I have no further comments at the time being. Moving on to Latin America, where growth continued to accelerate both year-on-year and quarter-on-quarter. Brazil is driving growth as the new regulation is settling in. During the quarter, we also noted that the main competitor in Live decided to close down operations in Argentina. We have seen this in several parts of the world in the past. That's despite large resources in a high; it's highly complex and expensive to build a Live at scale. Next slide, please. Okay, let's take a step back and look at our global footprint of studios. 2026 marks the 20th anniversary of Evolution, and up until 2013, we operated with only one studio out of Latvia.
Speaker #2: in, during the quarter, we also noted that the main competitor in live decided to close down operations in Argentina. We have seen this in several parts of the world in the past.
Speaker #2: That's despite large resources in—it's highly complex and expensive to build a live at scale. Next slide, please. Okay. Let's take a step back and look at our global footprint of studios.
Speaker #2: 2026 marks the 20th anniversary of Evolution, and up until 2013, we operated with only one studio out of Latvia. Fast forward to today, we have 24 studios with a four latest being located in Brazil, the Philippines, Romania, and New Jersey.
Martin Carlesund: Fast forward to today, we have 24 studios, with the four latest being located in Brazil, the Philippines, Romania, and New Jersey. In the very beginning of Evolution's history, it was possible to target several markets from that one studio in Latvia. But as the regulation has evolved, more markets are putting demands on local presence. Even though it requires a larger investment, this is great, for Evolution, as we have an unrivaled experience in building studios with very short lead times. It's a know-how that provides us with a competitive advantage, raises the barriers to success for others, and also speaks to regulators that we can quickly set up operation and offer job opportunities in their local markets.
Speaker #2: In the very beginning of Evolution's history, it was possible to target several markets from that one studio in Latvia. But as regulation has evolved, more markets are putting demands on local presence.
Speaker #2: Even though it requires a larger investment, this is great for Evolution. As we have an unrivaled experience in building studios with very short lead times, it's a know-how that provides us with a competitive advantage, raises the barriers to success for others, and also speaks to regulators that we can quickly set up operations and offer job opportunities in their local markets.
Speaker #2: Another aspect of the scale of Evolution is that our studios are connected in a star network, and we can use and direct usage independently creating scalability over all time zones.
Martin Carlesund: Another aspect of the scale of Evolution is that our studios are connected in a Star Network, and we can use and direct usage independently, creating scalability over all time zones. Next slide, please. I earlier mentioned the breathtaking Roadmap, 2026. As you remember, last year, we entered an exclusive partnership with Hasbro for online Live Casino and slot games for Monopoly and other Hasbro game titles. It's an exclusive worldwide deal that covers online content for all our brands in Live and RNG, a true milestone that will enable us to bring fantastic games to our players. Two weeks ago, we showcased some of the titles that we will launch during this year at ICE, which is the industry's largest yearly exhibition. Normally, we state that we have one big showcase title, like Ice Fishing last year, but this year it is impossible to pick one.
Speaker #2: Next slide, please. I already mentioned the breathtaking roadmap 2026. As you remember, last year we entered an exclusive partnership with Hasbro for online live casino and slot games, for Monopoly and other Hasbro game titles.
Speaker #2: It's an exclusive worldwide deal that covers online content for all our brands in live and RNG, a true milestone that will enable us to bring fantastic games to our players.
Speaker #2: Two weeks ago, we showcased some of the titles that we will launch during this year at ICE, which is the industry's largest yearly exhibition.
Speaker #2: Normally, we state that we have one big showcase title—like ICE Fishing last year. But this year, it is impossible to pick one. That's how strong the lineup is.
Martin Carlesund: That's how strong the lineup is. Let me just mention a few highlights from 2026, and let's start with Game Night, which will be the largest game show to date and a feast of bonus games based on Hasbro favorites, such as Connect Four and Hungry, Hungry Hippos. It will use the largest money wheel in the whole world, but instead of a flapper, it will have a roulette-style bouncing ball and a wheel that is set at 45 degrees angle. The wheel itself is enormous, but so are the hippos. Funnily enough, it will only be the biggest game show for a few months, because later in the year, we will launch Monopoly Filthy Rich.
Speaker #2: Let me just mention a few highlights from 2026, and let's start with Game Night, which will be the largest game show to date and a feast of bonus games, based on Hasbro favorites such as Connect 4 and Hungry Hungry Hippos.
Speaker #2: It will use the largest money wheel in the whole world, but instead of a flapper, it will have a roulette-style bouncing ball and a wheel that is set at a 45-degree angle.
Speaker #2: The wheel itself is enormous. But so are the hippos. Funnily enough, it will only be the biggest game show for a few months because later in the year, we will launch Monopoly Filthy Rich.
Speaker #2: This will be a gigantic Hollywood-style game show in a studio that would make any moviemaker jealous. With five exciting bonus game rounds on MONOPOLY features, plus a super bonus, MONOPOLY World.
Martin Carlesund: This will be a gigantic Hollywood-style game show in a studio that would make any movie maker jealous, with five exciting bonus game rounds on Monopoly features, plus a super bonus, Monopoly World. Also based on Monopoly is Monopoly Roulette, which will be the only roulette with two bonus games, and a Monopoly Roll-On, a two-dice game with a Monopoly-style board. We will also launch several new Monopoly titles within RNG Universe. The first one being Monopoly Deluxe from BTG, that is already live. In addition to the Hasbro titles, we will launch many other games that will appeal to both traditional players and others. Dragon Dragon, which might be the coolest name ever on a game, is a simple, fast-paced guessing game where players bet on whether two cards will be yellow, red, or both.
Speaker #2: Also based on Monopoly is Monopoly Roulette, which will be the only roulette with two bonus games. And on Monopoly Roland, a two-dice game with a Monopoly-style board.
Speaker #2: We will also launch several new Monopoly titles within RNG universe. The first one being Monopoly Deluxe from BTG that is already live. In addition to the Hasbro titles, we will launch many other games that will appeal to both traditional players and others.
Speaker #2: Dragon Dragon, which might be the coolest name ever on the game, is a simple, fast-paced guessing game where players bet on whether two coins will be yellow, red, or six. Blackjack—the dealer card is always six—which provides a more predictable game.
Martin Carlesund: In Always Six Blackjack, the dealer card is always six, which provides a more predictable game. From Ezugi, we have Arcade Roulette, which is a unique alternative to the classic roulette, using a classic claw machine as a very nice piece of engineering, by the way. In total, we have more than 110 new games and RNG releases planned for the year, and I could not be more excited. Our CPO, Todd Haushalter, described this year's roadmap as all about fun, fun, fun, and that is exactly what it is. 2026 will increase the gap to any competitor more than ever, but more importantly, we are creating great entertainment for every single player. With that, I will hand over to you, Joakim, for a closer look at our financials. Next slide, please.
Speaker #2: From a SUGI, we have Arcade Roulette, which is a unique alternative to the classic roulette using a classic claw machine as a very nice piece of engineering, by the way.
Speaker #2: total, we have more than In 110 new games and RNG releases planned for the year. And I could not be more excited. Our CPO, Todd Horsalper, described this year's roadmap as all about fun, what it is.
Speaker #2: 2026 fun, fun. And that is exactly competitor more than ever, but will increase the gap to any more importantly, we are creating great entertainment for every single player.
Speaker #2: And with that, I will hand over to Joakim for a closer look at our financials. Next slide, please. Excellent, Martin. Thank you. So let's now spend a few minutes on the financial details.
Joakim Andersson: Excellent, Martin. Thank you. So let's now spend a few minutes on the financial details. I'm now on slide 10 and will repeat a few messages that Martin opened up with. You will on this slide, see our revenue and Adjusted EBITDA development over time. The full year 2025 has seen a flat revenue development, while the quarter-by-quarter trajectory shows a somewhat uneven trend. In the fourth quarter, we are reporting EUR 514 million of revenues, EUR 341.5 million in Adjusted EBITDA, and consequently, a 66.4% margin. As Martin said, with this quarter, we are ending up at 66.1% in EBITDA margin for the full year of 2025, which is within our margin guidance. Let's go to the next slide.
Speaker #2: I'm now on slide 10, and we'll repeat a few messages that Martin opened up with. We will, on this slide, see our revenue and adjusted EBITDA development over time.
Speaker #2: The full-year 2025 revenue has seen a development, while the quarter-by-quarter trajectory shows a somewhat uneven trend. In the fourth quarter, we are reporting €514 million in revenues, €341.5 million in adjusted EBITDA, and consequently, a 66.4% margin.
Speaker #2: As Martin said, with this quarter, we are ending up at 66.1% in EBITDA margin for the full year of 2025, which is within our margin guidance.
Speaker #2: Let's go to the next slide. And on this slide, we will have a more detailed look at our profit and loss statement. I have highlighted a few key takeaways from this slide, and I will comment on them one by one.
Joakim Andersson: On this slide, we will have a more detailed look at our profit and loss statement. I have highlighted a few key takeaways from this slide, and I will comment on them one by one. So first, and again, net revenues of EUR 514 million. In this quarter, we have EUR 51.7 million of other operating revenues, which is due to a reduction of an earn-out liability. This is the only amount we are adjusting for when we talk about our adjusted EBITDA and adjusted EBITDA margin. As you can see, and as I have highlighted on the slide, we have similar adjustments also in Q3 and Q4, 2024. Moving on to the second highlight.
Speaker #2: So, first and again, net revenues of €514 million. In this quarter, we have €51.7 million of other operating reduction of an earn-out liability. This is the only amount we are adjusting for when we talk about our adjusted EBITDA and adjusted EBITDA margin.
Speaker #2: As you can see, and as I have highlighted on the slide, we had similar adjustments also in Q3 and Q4 2024. Moving on to the second highlight, total operating expenses amounted to 215 million, which is 6.3% higher than Q4 last year, and up 2.1% quarter on quarter.
Joakim Andersson: Total operating expenses amounted to EUR 215 million, which is 6.3% higher than Q4 last year, and up 2.1% quarter on quarter. Despite the costs being slightly higher quarter on quarter, we are beginning to see the benefits of our initiatives to drive operational efficiency. Several initiatives are ongoing when it comes to optimization of our tables and studios, as well as the way we work with our supporting functions. What is important to note is that this is not a one-off cost-cutting project. It's something that we will work with continuously. If we then move to the third highlight, it's our profit for the period that amounted to EUR 306.8 million in the quarter, and for the full year, we had a profit of EUR 1.06 billion.
Speaker #2: Despite the costs being slightly higher quarter on quarter, we are beginning to see the benefits of our initiatives to drive operational efficiency. Several initiatives are ongoing when it comes to optimization of our tables and studios, as well as the way we work with our supporting functions.
Speaker #2: What is important to note is that this is not a one-off cost-cutting project, but something that we will work with continuously. If we then move to the third highlight, it's our profit for the period that amounted to 306.8 million in the quarter and for the full year we had a profit of 1.06 billion finally, our earnings per share EPS after dilution amounted to 1.54 euros.
Joakim Andersson: Finally, our earnings per share, EPS, after dilution, amounted to 1.54 EUR. Let's move on to the next slide, where I'm going to show you the development of our cash flow. First, on our left-hand side, we have our operating cash flow after investment, which amounted to EUR 262 million in the quarter. One factor behind the relatively low cash flow this quarter was the seasonally weak working capital. While elevated year-end accounts receivable is a recurring pattern, we are actively addressing it, and we have seen good progress in January. The graph shows that in-year fluctuations are not unusual. However, the overall more uneven performance on top line in 2025 has driven greater volatility in our cash flow this year. Cash conversion remains solid and was at 82% for Q4.
Speaker #2: Let's move on to the next slide, where I'm going to show you the development of our cash flow. First, on our left-hand side, we have our operating cash flow after investments, which amounted to €262 million. The relatively low cash flow this quarter was due to the seasonally weak working capital.
Speaker #2: While elevated year-end accounts receivable is a recurring pattern, we are actively addressing it, and we have seen good progress in January. The graph shows that in-year fluctuations are not unusual.
Speaker #2: However, the overall more uneven performance on top line in 2025 has driven greater volatility in our cash flow this year. Cash conversion remains solid, and was at 82% for the—then turning over to the other graph—and fourth quarter.
Joakim Andersson: Then turning over to the other graph and our capital expenditures, we can see that we are slightly up quarter-over-quarter, with a total CapEx relating to tangible and intangible assets of EUR 38.5 million. That also means that total CapEx for the year was EUR 134.8 million. Next slide, please. On this page, you will find a summary of the balance sheet for 2025 compared to what it looked like at the end of 2024. The main items that I usually highlight, which are all signs of our financial strength, are the value of the bond portfolio of EUR 104 million, our total cash balance that amounted to EUR 818 million, and the equity position that at the end of the year amounted to almost EUR 4.1 billion.
Speaker #2: Our capital expenditures—we can see that we are slightly up quarter on quarter, with a total capex relating to tangible and intangible assets of €38.5 million.
Speaker #2: That also means that total capex for the year was €134.8 million. Next slide, please. On this page, you will find a summary of the balance sheet for 2025 compared to what it looked like at the end of 2024.
Speaker #2: The main items that I usually highlight, which are all signs of our financial strength, are the value of the million, our total bond portfolio of 104 cash balance that amounted to 818 million, and the equity position that at the end of the year amounted to almost 4.1 billion.
Speaker #2: Although a minor point, as mentioned earlier during the P&L review, we have made an adjustment to our earn-out liabilities. Consequently, the 'other liabilities' category on the balance sheet shows a slight quarter-on-quarter adjustment.
Joakim Andersson: Although a minor point, as mentioned earlier during the P&L review, we have made an adjustment to our earn out liabilities. Consequently, the other liabilities category on the balance sheet shows a slight quarter-over-quarter adjustment. We continued with the buybacks in the fourth quarter, and in total, we invested EUR 93.7 million and bought back 1.6 million shares. In total, we invested EUR 500.2 million in 2025 and got 7.3 million Evolution shares, which today corresponds to 3.6% of the company. And when talking about buybacks, we wanted to highlight what the total shareholder remuneration has looked like over the last years. On this slide, you will see dividend payments in blue boxes and buybacks in green boxes. There are a few takeaways from this slide, but I would like to point you to two of them.
Speaker #2: We continued with buybacks in the fourth quarter, and in total, we invested €93.7 million and bought back 1.6 million shares. In total, we invested €500.2 million in 2025, and got 7.3 million Evolution shares, which today corresponds to 3.6% of the company.
Speaker #2: And when talking about buybacks, we wanted to highlight what the total shareholder remuneration has looked like over the last years. On this slide, you will see dividend payments and buybacks in green from this slide, but I would like to point you to, firstly, as illustrated by the two of them.
Joakim Andersson: Firstly, as illustrated by the gray bar to the right, we have returned more than EUR 3.5 billion to our shareholders since 2020. Secondly, during 2025 alone, total shareholder remuneration amounted to almost EUR 1.1 billion, which equates to a yield of 9.3% based on the market cap at year-end. With that remark, I will hand it back to Martin.
Speaker #2: Gray bar to the right, we have returned more than €3.5 billion to our shareholders since 2020. Secondly, during 2025 alone, total shareholder remuneration amounted to almost €1.1 billion, which equates to a yield of 9.3% based on the market cap at year-end.
Speaker #2: With that remark, I will hand it back to you.
Speaker #1: Thank you, Joakim. So let's summarize, and then move on to the Q&A. Operationally, it was a good quarter and year—maybe the best ever.
Martin Carlesund: Thank you, Joakim. So let's summarize and then move on to the Q&A. Operationally, it was a good quarter and year, maybe the best ever. We increased efficiency, maintained margin, delivered fantastic gains, and continued to expand our footprint just as we should... But we also handled many challenges, always standing up for what we believe in, always trying to do the right thing. The situations we have been put up against and are still handling are not something any company could do, especially not while also being able to maintain revenues, deliver both a solid margin, and an excellent cash flow. It shows what a fantastic management team we have, with the right values, as well as the thousands of experts and young talents across the globe that build Evolution to the strong company that we are.
Speaker #1: We increased efficiency, maintained margin, delivered fantastic gains, and continued to expand our footprint just as we should. We also handled many challenges, always standing up for what we believe in, always trying to do the right thing.
Speaker #1: We have been put up—the situations against and are still handling are not something any company could be able to maintain revenues, deliver both a solid margin and an excellent do, especially not while also being cash flow.
Speaker #1: It shows what a fantastic management team we have, with the right values, as well as the thousands of experts and build evolution to the strong company that we are.
Speaker #1: I would like to send my sincere thank you to each and every one of those. And, speaking about the excellent cash flow, I would also mention that the Board will decide and announce its recommendation regarding capital allocation for 2025 earnings later this quarter.
Martin Carlesund: I would like to send my sincere thank you to each and every one of those. Speaking about the excellent cash flow, I would also mention that the board will decide and announce its recommendation regarding capital allocation for 2025 earnings later this quarter. All in all, we are, in spite of the financial development, proud of 2025. But with that said, we want to do more in 2026. We will deliver absolutely fabulous product over at 2026. Expansion will be at full speed in US and LatAm, while we continue to invest in Europe, and at the same time deliver margin in line with 2025, meaning 66%. I really look forward to the rest of 2026. Now, thank you for listening, and we will open up for questions.
Speaker #1: All in all, we are inspired by the financial development, proud of 2025. But with that said, we want to do more in 2026. We will deliver an absolutely fabulous product roadmap for 2026. Expansion will be at full speed in the US and LATAM, while we continue to invest in Europe and at the same time deliver margin in line with 2025, meaning 66%.
Speaker #1: I really look forward to the rest of 2026. Now, thank you for listening. We will open up for questions. On the Q&A slide, you will also find a link that takes you to a video—almost like an early Easter egg—with a sneak peek of the amazing roadmap that you can watch after the call.
Martin Carlesund: On the Q&A slide, you will also find a link that takes you to a video, almost like an early Easter egg, with a sneak peek of the amazing roadmap that you can watch after the call. Please click it. Have fun. Next slide, please, and then we're open for questions.
Speaker #1: Please click it. Have it open for
Speaker #1: questions. If
Speaker #2: you wish to ask a question, please dial, pound key 5 on your telephone keypad to enter the queue. If you
Operator: If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Ed Young, from Morgan Stanley. Please go ahead.
Speaker #2: dial, pound key 6 on your telephone wish to withdraw your question, please fun.
Speaker #2: Keypad. The next question comes from Ed Young from Morgan Stanley. Please go ahead.
Ed Young: Good morning. I've got three questions, please. First of all-
Speaker #3: Good morning. Next slide, please.
Speaker #3: I've got three questions, please. First of all, on the good morning. First of all, on And then we the new games, I think for anyone who went to ICE or has seen the roadmap, the opportunity with the tier seems almost obvious with the Hasbro releases.
Martin Carlesund: Good morning.
Ed Young: Good morning. First of all, on the new games, I think for anyone who went to ICE or has seen the roadmap, the opportunity for this year seems almost obvious with the Hasbro releases. But for 2025, you discussed being really happy with the operational performance. That obviously wasn't matched, you know, financially. What would it take in 2026 for the progress on the content and operational side to be more matched in the financial performance? The second question, if it's okay to ask them together, there's this obvious sequential-
Speaker #3: But for 2025, you discussed being really happy with the operational performance. That obviously wasn't matched financially. What would it take in 2026 for the progress on the content and operational side to be more matched in the financial performance?
Speaker #3: The second question, if I'm okay to ask them together, there's obviously a
Speaker #3: Sequential. Okay, let's do Ed. That one. Sure. Sure, sure.
Martin Carlesund: Let's take one more, Ed.
Ed Young: Okay, let's do, let's do that one. Sure. Sure, sure.
Martin Carlesund: You know, my memory is very, very good, but short. So no, but to deliver on 2020, in 2026, just a stable environment. If we just could have a stable environment, solve a little bit continuously, meticulously, get a little bit better in Asia, that's it. No more, no less.
Speaker #1: It's very, very good, but short. My memory says no, but to deliver on 2020 in 2026, just a stable environment. If we could just have a stable environment, solve a little bit continuously, meticulously, get a little bit better in Asia, that's it.
Speaker #1: No more, no less.
Speaker #3: Okay. There was a sequential decline quarter on quarter in Europe. Could you perhaps give us a bit more color? Obviously, as you mentioned, ring-fencing measures went in early last year.
Ed Young: Okay.
Martin Carlesund: Next question.
Ed Young: There was a sequential decline, quarter-over-quarter in Europe. Could you perhaps give us a bit more color? Obviously, as you mentioned, ring-fencing measures went in early last year. Was there any particular extra regulatory development or change, or are you seeing any underlying change at a customer level or in the markets that can help explain that? And how should we think about sequential European growth as we head into 2026?
Speaker #3: Was there any particular extra regulatory development or change, or are you seeing any underlying change at a customer level or in the markets that can help explain that?
Speaker #3: And how should we think about sequential European growth as we head into 2026?
Martin Carlesund: We're not happy with the quarter in Europe. There are a lot of effects on the regulatory measures and the instability of the market, and some countries are not developing according to what we want. So it was not a good quarter. The overall situation in Europe, where the channelization now drops to 50% level in certain countries or some countries which are good, that affects us. We only target 50% of the market, and the regulation is not balanced right now, so the players are pushed out of the regulatory remit, so that affects us. So the total situation in Europe wasn't good in the quarter.
Speaker #1: We're not happy with the quarter in Europe. There are a lot of effects on the regulatory measures, and the instability of the market, and some countries are not developing according to what we want.
Speaker #1: So it was not a good quarter. The overall situation in Europe, where the channelization now drops to 50% level in certain countries or some countries which are good, that affects us.
Speaker #1: We only target 50% of the market. And with the regulation, some players are pushed out of the regulatory remit. So that is not balanced right now.
Speaker #1: affects us. So the total situation in Europe wasn't good in the
Speaker #1: quarter. Okay.
Ed Young: Okay, finally, could you give us an insight of why you've given this new geographic disclosure? What's the message you're giving us?
Speaker #3: Finally, could you give us an insight into why you've given this new geographic disclosure? What's the message you're giving?
Speaker #3: Us? It's not too much smoke.
Martin Carlesund: It's not too much smoke signals. It's... There is a lot of focus on regulatory aspects, and we feel that it's important now to disclose and show this is our revenue, this is our customers, this is where our customers are. Regarding the geographical split of revenues, that's our customers provided IP address of their players. It felt like it was time to disclose that and show that to you, to put a little bit of emphasis on that.
Speaker #1: Signals. There's a lot of focus on regulatory aspects and where players are coming from, and so on. And we feel that it's important now to disclose and show: this is our revenue.
Speaker #1: This is our customers. This is where our customers are. Then the regulator, the geographical split of revenues— that's our customers' provided IP address of their players.
Speaker #1: And it felt like it was time to disclose that and show that to you to put a little bit of emphasis on
Speaker #1: that. Okay.
Ed Young: Okay, thank you.
Speaker #3: you.
Martin Carlesund: Thank you. Thank you.
Speaker #3: Thank Thank Thank you.
Speaker #2: The next question comes from Georg Atling from Pareto Securities. Please go ahead.
Operator: The next question comes from Georg Attling, from Pareto Securities. Please go ahead.
Georg Attling: Yeah, exactly. Morning, guys. Thanks for taking my questions.
Speaker #4: Morning, guys. Thanks for taking my questions. I'll just start with what you alluded to in Nevada. So the direct question is really if you think there is a need for further ring-fencing to complete this Galaxy acquisition.
Martin Carlesund: Good morning.
Georg Attling: I'll just start with what you alluded to in Nevada. So, the direct question is really if you think there is a need for further ring-fencing to complete this Galaxy acquisition? Thanks.
Speaker #4: Thanks.
Martin Carlesund: We are progressing with the Galaxy acquisition. The Galaxy acquisition is not large enough to affect our business model in general. So we are moving forward according to the business model that we have.
Speaker #1: We are progressing with the Galaxy acquisition. The Galaxy acquisition is not large enough to affect our business model in general, so we are moving forward according to the business model that we have.
Speaker #4: Okay. Second question on the CapEx here in 2026. How should we think about this, given you gave no guidance? Is it in line with '25 or a ramp-up from that base?
Georg Attling: ... Okay, second question on the, on the CapEx here in 2026, how should we think about this, given you gave no guidance, is it in line with 2025 or a ramp up from that base?
Speaker #1: We will get back on it. It's just a couple of weeks. It will be well in time for the AGM. So, we look forward to disclosing good capital allocation policy and action for 2025 figures.
Martin Carlesund: We will get back on it in just a couple of weeks. It will be well in time for the AGM. So we look forward to disclose a good capital allocation policy and action for 2025 figures quite soon.
Speaker #1: Quite soon.
Speaker #4: Okay, and then just a final question on Asia. I mean, it's been very choppy here the last three quarters. What's your view on the underlying development in trying to combat these cybersecurity problems?
Georg Attling: Okay. And then just a final question on Asia. I mean, it's been very choppy here the last 3 quarters. What's your view on, you know, the underlying development in trying to combat these cybersecurity problems? Has it been stable since the last 3, 4 quarters, or is it really an underlying improvement here in Q4?
Speaker #4: Has it been stable over the last three or four quarters, or is there really an underlying improvement here in...
Speaker #4: Q4? The market development in Asia has
Martin Carlesund: The market development, Asia has been also choppy a little bit, some countries, and it's not been super stable, but still good. I mean, we had a not so good Q3, and now we're slowly taking back a little bit. We're happy with that movement. We're doing a little bit of action, slowly, slowly getting to term for the cyber criminality and hoping to see better development, of course, forward, but we don't know exactly when that will happen.
Speaker #1: It's been also choppy a little bit. Some countries, and it's not been super good. I mean, we are stable, but still had a not-so-good Q3, and now we're slowly taking back a little bit.
Speaker #1: We're happy with that movement. We're doing a little bit of action, slowly, slowly getting to terms with the cybercriminality and hoping to see better development, of course, forward.
Speaker #1: But we don't know exactly when that will happen.
Speaker #4: Yep. And when you look into '26 in Asia, do you see that this will largely be resolved, or will it take longer than—
Georg Attling: Yep. And when you look into 2026 in Asia, do you see that this will largely be resolved, or will it take longer than that?
Speaker #4: that?
Speaker #1: I
Martin Carlesund: I can't guide you on that. We are working day and night to find ways to do it. It's a very complex environment, and someone is really stealing our product, and we do what we can, and I know that there are others that experience the same thing. So we will see how and how fast we can resolve this.
Speaker #1: can't guide you on that. We are working day and night to find ways to do it. It's a very complex environment, and someone is really stealing our product.
Speaker #1: And we do what we can. And I know that there are others that experience the same thing. So we will see how, and how.
Speaker #1: That's all I have. We can resolve this fast.
Speaker #1: this. Okay.
Georg Attling: Okay. That's all I have. Thanks very much. Thanks so much.
Speaker #4: Thank you very much. Thank you so much.
Martin Carlesund: Thank you. Bye.
Speaker #1: Thanks. The next
Speaker #2: Question comes from Martin Arnell from DNB Carnegie. Please go ahead.
Speaker #2: Question comes from Martin Arnell from DNB Carnegie. Please go.
Operator: The next question comes from Martin Arnold from DNB Carnegie. Please go ahead.
Speaker #2: ahead. Good morning, guys. Good
Martin Arnold: Good morning, guys.
Speaker #1: morning.
Martin Carlesund: Good morning.
Speaker #5: My first question is on the situation in Europe. You said it wasn't good in the quarter, and we saw that. But is there anything that suggests it will, or could, improve in the coming quarters here?
Martin Arnold: My first question is on the situation in Europe. You said it wasn't good in the quarter, and we saw that, but is it anything that suggests that it will or could improve in the coming quarters here?
Speaker #1: I think we can, thank you, do better than what we did now. That's a little bit the same as I answered to 'add what do you need to do better.'
Martin Carlesund: I think we can do better than what we did now. That's a little bit the same as I answered to add, like, what do you need to do better? A little bit stable environment, then it will look really good.
Speaker #1: A little bit stable environment, then it will look really good.
Speaker #1: Good. So, it’s also in your—
Martin Arnold: So it's also in your hands and not only sort of in the how the regulatory markets are working, or?
Speaker #5: hands, and not only sort of in how the regulatory markets are working,
Speaker #5: hands and not only sort of in the how the regulatory markets are working, or? You can always do
Martin Carlesund: You, you can always do better. I mean, even if we would have a growth of 50% in the quarter, and you would ask me, we can always do a little bit more. Now, adding the games that we have on the roadmap will of course make a difference, and I look forward to do that. So there's more to do always. But the baseline is that a little bit stable environment would be. That would be very nice.
Speaker #1: In the quarter four, and you would ask, we would have a growth of 50% better. I mean, even if me, we can always do a little bit more.
Speaker #1: Now, adding the games that we have on the roadmap will, of course, make a difference. And so there's more to do; I look forward to doing that.
Speaker #1: Always. But the baseline is that a little bit stable environment would be—that would be very nice.
Speaker #5: And on that topic, what's been the reception so far in Barcelona on, for example, on the new Monopoly games among your big customers?
Martin Arnold: And on that topic, what's been the reception so far when you conclude from ICE in Barcelona, for example, on the new Monopoly games among your big customer network?
Speaker #5: network? They are
Martin Carlesund: They are flabbergasted. I don't know to find a... They are- everyone-- There's no... Everyone looks at the games and like, "Wow, when are we gonna get them?" So everyone looks at the games like there is nothing in comparison. There is no one else doing anything else in that is even remotely doing what we do. So when they look at our roadmap, they are like: "Ooh, when can we have it?
Speaker #1: Flabbergasted. I don't know. To find a—they are everyone. There is no 'everyone looks at the games'—them? Everyone looks at the games like there is, and like, 'Wow, when are we going to get—' nothing in comparison.
Speaker #1: There is no one else doing anything else that is even remotely doing what we do. So when they look at our roadmap, they are like, "Ooh, when can we have it?"
Speaker #5: Sounds interesting. And when is the first game launched? Is that April for the Monopoly one of the three?
Martin Arnold: Sounds interesting. When is the first game launch? Is that April on the Monopoly, one of the three?
Speaker #1: We will release a couple of games now with RNG. As you saw, Monopoly Deluxe is already out. It will come, and we are eager to do it as soon as possible.
Martin Carlesund: We will release a couple of games now with RNG. As you saw, Monopoly Deluxe is already out. They will come and we are eager to do it as soon as possible, but Q1, Q2, a couple of games, and then throughout the year.
Speaker #1: But Q1, Q2, a couple of games, and then throughout the year.
Martin Arnold: Final question from me. There was a lot of discussions on AI at Barcelona and ICE, and, you know, how could that impact Live Casino? Can you clarify your view on that?
Speaker #5: Discussions on AI at Barcelona and ICE, and how could that impact live casino? Can you clarify your view on that?
Speaker #5: That? I think AI is a
Martin Carlesund: I think AI is a great opportunity. I think that we will use AI. We will probably have a product with a virtual dealer, just like we have First Person, which are games that are top of the line, best in the world. Then I think that, as I stated before, AI is 2026, maybe up until 2030, the best support tool there are. You will give a person meeting another person, all the information that they need to have on how to handle it and all the customer information or whatever it is. I don't think that you or me would like to have an AI bot answering the questions or doing that all the time.
Speaker #1: Great opportunity. I think that we will use AI. We will probably have a product with a virtual dealer, just like we have first-person— which are games that are top of the line, best in the world.
Speaker #1: Then I think AI is that, as I stated before, in 2026, maybe up until 2030, the best support tool there is. You will give a person meeting another person all the information that they need to have on how to handle it.
Speaker #1: And all the customer information or whatever it is. I don't think that you or me would like to have an AI bot answering the questions or doing that all the time.
Speaker #1: Many times, we still want the human interaction. And the development with TikTok and that type of videos is going in the other direction. So you have to—we have to do it.
Martin Carlesund: Many times, we still want the human interaction, and the development with TikTok and that type of videos is going in the other direction. So, we have to do it. It will happen. It will be there. There will be an AI dealer doing it, and it will be absolutely smashingly beautiful, but real life, real physical events will still be there for the years to come.
Speaker #1: It will be an AI dealer doing it. And it will—it will happen. It will be there. There will be—absolutely—smashingly beautiful. But real-life, real physical events will still be there for the years to come.
Speaker #1: There will be an AI dealer doing it, and it will happen. It will be there. It will be absolutely, smashingly beautiful. But real-life, real physical events will still be there for years to come.
Speaker #5: Thanks a lot,
Martin Arnold: Thanks a lot, guys.
Speaker #5: guys. Thank
Speaker #1: you. The next
Martin Carlesund: Thank you.
Operator: The next question comes from Monique Pollard from Citi. Please go ahead.
Speaker #2: The question comes from Monique Pollard from Citi. Please go ahead.
Monique Pollard: ... Hi, morning, everyone. Thank you for taking my question.
Speaker #6: Hi, morning everyone. Thank you for taking my—
Speaker #6: question. Good
Martin Carlesund: Good morning.
Speaker #1: morning.
Monique Pollard: Morning. The first question was just on the EBITDA margin. So that's come in at 66.1%, obviously, for the year, so the low end of the guided range of 66% to 68%. And then, you know, obviously, 2026, you're saying similar to the 66.1% you achieved in the 2025. I'm just trying to understand if over time, you know, there's been a bit of a shift, obviously, in where the studio capacity and studio locations are, and whether that is putting upward pressure, sorry, downward pressure on the margins, or whether it's just a lack of being able to scale the top line, because the top line's been coming in slightly weaker than expected.
Speaker #6: Morning. The first question was just on the EBITDA margin. So, that's come in at 66.1% obviously for the year, so the low end of the guided range of 66. And then, obviously, for 2026, you're seeing similar to the 66.1% you achieved in 2025.
Speaker #6: I’m just trying to understand if, over time, there’s been a bit of a shift, obviously, in where the studio capacity and studio locations are, and whether that is putting upward pressure—sorry, downward pressure—on the margins, or whether it’s just a lack of being able to scale the top line, because the top line’s been coming in slightly weaker than—
Speaker #6: expected. It's a good
Martin Carlesund: It's a good question. I would answer it like, there's always ifs and buts, but if we wouldn't have ring-fenced, you would have seen a much higher margin. Because we simply would have had higher volume on the same capacity. If we wouldn't have had the situation where we actually took down the delivery out of some studios due to the strike recently, and then moved it around, we would have had higher margin. So it's a combination that now the resource mix is much better, and we're slowly getting back to the right capacity. And of course, if we would have had a little bit more revenue, it would have fell through, and the incremental margin would have been good on that revenue. So it's a little bit of both.
Speaker #1: Question. I would answer it like there's always 'ifs' and 'buts.' But if we wouldn't have ring-fenced fans, you would have seen a much higher margin.
Speaker #1: Because we simply would have had higher volume on the same capacity. If we wouldn't have had the situation where we actually took down the delivery out of some studios due to the strike recently, and then moved it around, we would have had a higher margin.
Speaker #1: So it’s a combination of that. Now the resource mix is much better, and we’re slowly getting back to the right capacity. And of course, if we would have had a little bit more revenue, it would have fallen through.
Speaker #1: And the incremental margin would have been good on that revenue, so it's a little bit of both.
Speaker #5: Yeah. And I can maybe add, and it's also, I mean, a little bit in the future because when new countries or regions open up, with new regulation, then it's very much up to that regulation and the kind of rules for the regulation and the rules to operate and with local studios, etc., which always will have then, of course, will have an impact on the margin going forward.
Joakim Andersson: Yeah, and I can maybe add, and it's also, I mean, a little bit in the future, because when new countries or regions open up with new regulation, then it's very much up to that regulation and the kind of rules for the regulation and the rules to operate, and with local studios, et cetera, which always will have then, of course, an impact on the margin going forward. But that's difficult to speculate on.
Speaker #5: That's difficult to speculate on.
Martin Carlesund: Yeah.
Speaker #6: Understood. And Yeah. then the second question, you mentioned, obviously, the working capital it's a seasonally weaker, but also there was this sort of issue with the accounts receivable, but that you're having some good progress with through sort of what you're doing there to try and sort of combat that rising accounts receivable?
Monique Pollard: Understood. And then the second question was, you know, you mentioned obviously the working capital, you know, it's seasonally weaker, but also there was this sort of issue with the accounts receivable, but that you're having some good progress with that in January. Could you talk us through sort of what you're doing there to try and sort of combat that rising accounts receivable?
Speaker #1: Yeah, sure. And what I meant—I mean, the seasonally weak AR is due to year-end Christmas holidays and breaks. I think it's a very common theme.
Joakim Andersson: Yeah, sure. What I meant, I mean, the seasonally weak AR is due to year-end Christmas holidays and breaks. I think it's a very common theme. I think that we also, I mean, as a big, big company, strong financials, maybe we customers a little bit taking advantage of that and using us as a little bit of a bank over year-end to polish their working capital. So I think that's the main reason for why we saw the build-up in December. Then, I mean, naturally, in January, we follow up on everything where it's outstanding. Customers have-- we've seen a lot of customers paying because of the fact that we are past year-end. So nothing, nothing, no drama, although the numbers were a little bit higher maybe than expected.
Speaker #1: I think that we also, I mean, as a big company with strong financials, maybe we have customers a little bit taking advantage of that and using us as a little bit of a bank at year-end to polish their working capital.
Speaker #1: So, I think that's the main reason for why we saw the build-up in December. Then, I mean, naturally, in January, we follow up on everything where it's outstanding.
Speaker #1: Customers have seen a lot of customers paying because of the fact that we have past year-end, so nothing, no drama. Although the numbers were a little bit higher, maybe, than expected, and no drama.
Joakim Andersson: No drama, and we see the swing back on working capital now.
Speaker #1: And then we see the swing back on working capital now.
Speaker #6: Okay. That's clear. And then I had a question just on Europe. Obviously, you've mentioned you think you now have the strongest ring fencing measures in place, amongst the suppliers.
Monique Pollard: Okay. That's clear. And then, I had a question just on Europe. Obviously, you've mentioned you think you now have the strongest ring-fencing measures in place among the suppliers. I just wanted to understand whether you had progressively ring-fenced any more markets during Q4 in Europe, or whether, you know, the markets that you ring-fenced back in February were the same that have been ring-fenced out? I didn't know if there'd been any progression on your part in terms of what you were doing.
Speaker #6: I just wanted to understand whether you had progressively ring-fenced any more markets during Q4 in Europe, or whether the markets that you ring-fenced back in February were the same that have been ring-fenced out?
Speaker #6: I didn't know if there had been any progression on your part, in terms of what you were doing.
Speaker #1: No, it's about the same. There's no big difference. I think that the channelization is one challenge, and a little bit of instability in general in the markets is one challenge.
Joakim Andersson: No, it's about the same. There's no big difference. I think that the channelization is one challenge, and a little bit instability in general in the markets is one challenge during the quarter. And we look forward to get a more stable environment in 2026.
Speaker #1: During the quarter, and we look forward to getting a more stable environment.
Speaker #1: 2026. Excellent.
Monique Pollard: Excellent. My final question was just on the RNG growth rate. Obviously, that slowed slightly in the fourth quarter after a stronger Q3. So just wondered, you know, whether you think either the roadmap of product that you've got coming in for RNG and more or other things could sort of help re-accelerate that growth rate as we go through 2026?
Speaker #6: And my final question was just on the R&D growth rate. Obviously, that slowed slightly in the fourth quarter after a stronger Q3. So I just wondered whether you think either the roadmap of products that you've got coming in for R&D in Q1, or other things, could sort of help re-accelerate that growth rate as we go through.
Speaker #6: 2026? I think we can do even better.
Joakim Andersson: I think we can do even, we can do more in RNG, yes. I think that for sure, Monopoly, but also our own brands will help a lot.
Speaker #1: We can do more in R&D, yes. And I think that for sure, Monopoly, but also our own brands will help a lot.
Speaker #6: Understood. Excellent. Thank you very
Monique Pollard: Understood. Excellent. Thank you very much.
Speaker #6: much.
Speaker #1: Thank you. Thank you
Martin Carlesund: Thank you.
Joakim Andersson: Thank you very much. Thank you.
Speaker #5: very much. Thank
Speaker #5: you. The next
Speaker #2: The question comes from Ben Shelley from UBS. Please go ahead.
Operator: The next question comes from Ben Shelley from UBS. Please go ahead.
Speaker #2: Ahead. Good morning, guys, and thanks for taking my question.
Ben Shelley: Good morning, guys, and thanks for taking my questions.
Speaker #7: questions.
Speaker #1: Good morning. Good
Martin Carlesund: Good morning.
Speaker #8: morning. So
Joakim Andersson: Morning.
Ben Shelley: So firstly, in the release, you spoke about a primary focus on the US and Latin America. Can you expand a bit on this, please? And is there a shift in the strategic focus here that we should be aware of?
Speaker #7: Firstly, in the release, you spoke about a primary focus on the US and Latin America. Can you expand a bit on this, please? And is there a shift in the strategic focus here that we should be aware of?
Speaker #7: Firstly, in the release, you spoke about a primary focus on the US and Latin America. Can you expand a bit on this, please? And is there a shift in the strategic focus here that we should be aware of?
Speaker #1: No, there is no shift in the strategic focus. All markets are equally important, and we continue doing exactly the same. So there's no shift. It's just that, in the coming period, we have quite a lot of things happening in the US.
Joakim Andersson: No, there is no shift in the strategic focus. All markets are equally important, and we continue doing exactly. So there's no shift. It's just that in the coming period, we have quite a lot of things happening in the US. We're launching Ezugi, and we're expanding in Latin America, so they come out as first where we are doing. And then as I stated several times, we hope for a little bit more stable environment, and then, of course, we continue to invest in Europe, but not as much because we don't need that in the same way.
Speaker #1: We're launching SUGI, and we're expanding in Latin America. So they come out as first where we are, doing, and then, as I stated several times, we hope for a little bit more stable environment. And then, of course, we continue to invest in Europe, but not as much, because we don't need that in the same way.
Speaker #7: Thanks. Very clear. And then just on the UK Gambling Commission, I know you still haven't heard anything, but it looks like you have changed your wording slightly on your release regarding the review.
Ben Shelley: Thanks. Very, very clear. And then just on the UK Gambling Commission, I know you still haven't heard anything, but it looks like you have changed your wording slightly on your release regarding the review. Does that reflect a change in your expected outcome?
Speaker #7: Does that reflect a change in your expected
Speaker #7: Outcome? I don't know anything about that one.
Martin Carlesund: ... I don't know anything about that more than what I knew before. No, actually, no. No, no intentional change in wording. It's just that months pass and I don't know what to make out of that. We're patiently waiting, and we're doing what we're doing. We have done ring-fencing since the beginning of last year. We'll see. Nope, no intentional change.
Speaker #1: Actually, no. No, no intentional change in more than what I knew before. No wording. It's just that months pass, and I don't know what to make of that.
Speaker #1: We're patiently waiting, and we're doing what we're doing. And we have done ring-fencing since the beginning of last year. And we'll see. No.
Speaker #1: No intentional change.
Speaker #7: Thank you. Thank you. And then, in your release—in your last release at Q3—you spoke about volatility in the Philippines and India. Obviously, Asia has grown quarter on quarter.
Ben Shelley: Thank you. Thank you. And then, in your last release at Q3, you spoke about volatility in the Philippines and India. Obviously, Asia has grown quarter-over-quarter. Is it right to think that these markets have stabilized now?
Speaker #7: That these markets have stabilized, is it right to think now?
Martin Carlesund: Philippines, more stable, yes. India, more stable, yes.
Speaker #1: Philippines more stable, yes. India more stable.
Speaker #1: yes. Thank you.
Ben Shelley: Thank you. That's all from me. Thanks very much, guys.
Speaker #7: That's all from me. Thanks very much, guys.
Speaker #1: Thank you very much. Thank you. Thank you.
Martin Carlesund: Thank you very much. Thank you.
Speaker #2: The next question
Andrew Tam: Thank you.
Operator: The next question comes from Andrew Tam, from Rothschild & Co Redburn. Please go ahead.
Speaker #2: Comes from Andrew Tam from Rothschild & Co Redburn. Please go ahead.
Speaker #4: Hi, good morning. Just two from me. The first one is just a segue from Ben's question on India. Given the Nevada industry guidance, and India being on that list as one of the 10 countries, are you planning to stop operations there?
Andrew Tam: Hi, good morning. Just two from me. A first one, just, a segue from Ben's question on India. Given the Nevada industry guidance and India being on that list as 1 of the 10 countries, are you planning to stop operations there, given your commitment to the Galaxy acquisition?
Speaker #4: Given your commitment to the Galaxy acquisition?
Martin Carlesund: We are not planning to change the business model as of now, due to the Galaxy acquisition, as I said before. We will look into the policy and see what comes out of that, and no, no decisions in that direction.
Speaker #1: We are not planning to change the business model as of now due to the Galaxy acquisition, as I said before. We will look into the policy and see what comes out of that, and no decisions in that direction.
Speaker #4: Understood. My second question—just trying to assess: it looks like Russia is considering regulating online casino. Will you be applying for a supplier's license there, or are you planning on stopping supply into the Russian market until that legalizes, given the Nevada guidance?
Andrew Tam: Understood. My second question, just trying to assess, it looks like Russia is considering regulating online casino. Will you be applying for a supplier's license there, or are you planning on stopping supply into the Russian market until that legalizes, given the Nevada guidance?
Speaker #1: We are not there. There are a lot of rumors, and Putin says one thing or another. I would just spontaneously see it as very difficult to apply for a license there, but let's see what happens in the world.
Martin Carlesund: We are not. There is a lot of rumors, and Putin says one thing or other. I would just spontaneously see it as very difficult to apply for a license there, but let's see what happens in the world.
Speaker #4: Understood. Thanks, guys.
Andrew Tam: Understood. Thanks, guys.
Speaker #1: Thank
Speaker #1: you. Thank
Martin Carlesund: Thank you.
Andrew Tam: Thank you.
Speaker #8: you.
Speaker #2: The next question comes from Rasmus Engberg from Kepler Cheuvreux. Please go ahead.
Operator: The next question comes from Rasmus Engberg, from Kepler Cheuvreux. Please go ahead.
Rasmus Engberg: Hi, good morning, guys.
Speaker #9: Hi, good morning, guys. Thanks for taking my question. I was just a little bit confused with Europe. Throughout your reported history, Q4 has never been weaker than Q3.
Martin Carlesund: Good morning.
Rasmus Engberg: Thanks for taking my question.
Martin Carlesund: Thank you.
Rasmus Engberg: I'm just a little bit confused with Europe. Throughout your reported history, Q4 has never been weaker than Q3, and now it is, and it's quite materially weaker. I'm just trying to understand, is there anything you can do to help us understand why that happened? Is it a new level going into 2026, or are there some sort of one-offs in Q4 that we should adjust for?
Speaker #9: And now it is. And it's quite materially weaker. I'm just trying to understand, is there anything you can do to help us understand why that happened?
Speaker #9: it a new level going into 2026, or are there some sort of one-offs in Q4 that we should adjust Is
Speaker #9: For? I can't say that there is.
Martin Carlesund: I can't say that there is any material one-offs that I can give and state that. It's a bad quarter, and there is a number of different aspects in the market. There is no difference in our performance or the way that we act or relation to our customers. Everything is fine, but the market was not in favor during Q4. That's a fact.
Speaker #1: any material one-offs that I can give and state that. It's a bad quarter, and there is a number of different aspects in the markets.
Speaker #1: There is no difference in our performance or the way that we act or relation to our customers. Everything is fine. But the market was not in favor during Q4.
Speaker #1: That's a fact.
Speaker #4: And considering this, could you update us on the group level? How do you think we should think about activity in Q1 in constant currencies relative to Q4?
Rasmus Engberg: Considering this, could you update us on the group level, how do you think... how we should think about activity in Q1 in constant currencies relative to Q4? Is it roughly similar, or how does it look seasonally?
Speaker #4: Is it roughly similar, or how does it look seasonally?
Martin Carlesund: If we take online gaming as a global phenomenon, I would say that Q4 is stronger, Q1 is a little bit weaker than Q4, but still a good quarter. But then, of course, you have February with 8% lesser days. I don't know if it's shorter this year or not, but so it's a little bit Q1 is okay, but a little bit weaker than Q4, on a global-
Speaker #1: If it would take phenomenon, I would say that Q4 is stronger. Q1 is a little bit weaker than Q4, but still a good quarter.
Speaker #1: But then, of course, you have February with 8% lesser days. I don't know if it's a Scot or this year or not, but it's a little bit Q1 is okay, but a little bit weaker than Q4.
Speaker #1: On a global scale.
Rasmus Engberg: Right.
Martin Carlesund: -scale.
Rasmus Engberg: Thanks. And just a final question: you still report much more tax than you pay, so you sort of accumulate that. Is that something you're going to continue to do going forward? How do you look at that from, you know, it's kind of a global question in a way, but.
Speaker #4: And just a final thanks. Question: You still report much more tax than you pay, so you sort of accumulate that. Is that something you're going to continue to do going forward?
Speaker #4: How do you look at that from—it's kind of a global question in a way, but.
Martin Carlesund: It's the Pillar Two, and it's really... If you ask me as CEO, it's a little bit up in the air. So we will see where that falls down eventually. But we, of course, according to Pillar Two, deduct for the 15% tax, so that's why it's on the balance sheet. And then there are rules of how and when and whatever that's going to be paid.
Speaker #1: It's the pillar two, and it's really if you ask me as CEO, it's a little bit up in the air. So we will see where that falls down eventually.
Speaker #1: But we, of course, according to pillar two, deduct for the 15% tax. So that's why it's on the balance sheet. And then there are rules of how and when and whatever that's going to be paid.
Rasmus Engberg: Hmm. So, no change there?
Speaker #4: So no change there.
Martin Carlesund: No.
Rasmus Engberg: All right, thanks.
Speaker #4: Thanks. The next
Speaker #2: question comes from Richard Stuber from Deutsche Bank. Please go
Operator: The next question comes from Richard Stuber, from Deutsche Bank. Please go ahead.
Speaker #2: ahead. for taking my questions.
Speaker #4: Hi, good morning. Thank you. On the litigation with Playtech, have you actually sort of named them as a defendant, and when will we next hear about the next phase of litigation?
Richard Stuber: Hi, good morning. Thank you for taking my questions. Apologies if you said it right at the very top, but could you give a bit more of an update in terms of the litigation with Playtech, and whether you've actually sort of named them as a defendant, and when we next hear on the next phase of litigation? And similarly, has this impacted any of your sort of commercial discussions with any new or existing clients? The second question is just you talk about this year you'll be growing, you think, in line with the sort of general markets and in the different regions. Could you just give us an indication what you think the market growth rates are in casino? Thank you.
Speaker #4: apologies if you said it right at the very top, but could you give a bit more of an update in terms
Speaker #4: similarly, has this impacted And I'm in any of your sort of commercial discussions with any new or existing clients? And the second question is just you talk about this year you'll be growing, you think, in line with the sort of general markets and in the different regions.
Speaker #4: Could you just give us an indication what you think the market growth rates are in casino? Thank you.
Martin Carlesund: There is no real update when it comes to the main litigation, meaning Playtech. It has its due course, it continues, and it's always slow, and it will be with us for a while. There's no material update. So we look forward to move forward with the lawsuit. Customer reactions to the way that our competitor have been acting and the type of companies that they have engaged, and the way that they did interviews and whatever else they did with former employees and so on, is of course shocking for many. Exactly what comes out of that, I don't know. But it's shocking. It's not good for the industry, it's not good for anyone, and it's shocking for our customers.
Speaker #1: real update when it comes to There is no the main litigation, meaning Playtech. It has its due course. It's continuous, and it's always slow, and it will be with us for a while.
Speaker #1: no material update. So we look There's forward to move forward with the lawsuit. Customer reactions to the way that our competitor have been acting and the type of companies that they have engaged and the way that they did interviews and whatever else they did with the former employees and so on is, of course, shocking for many.
Speaker #1: Exactly what comes out of that, I don't know. good for the industry. It's not good for anyone, and it's shocking for our But it's shocking.
Speaker #1: customers. When it comes to we have, of course, we want to take market share. We have the best product. We're moving forward, and we really want to grow faster than It's not the market.
Martin Carlesund: When it comes to—we have of course we want to take market share. We have the best product. We're moving forward, and we really want to grow faster than the market. Now, the market growth, it's very hard. I mean, our figures are public, but many others are not, so it's very hard to judge that. And often, when we get the market growth, we get it afterwards. So we are a little bit in the dark, as you are. Then there are 3i and different various institutes trying to measure it, and they are more often wrong than right. I don't have that. But once we look at the market growth, we want to be ahead of it, so that's the target.
Speaker #1: Growth is very hard. I mean, now, in the market, our figures are public, but many others are not. So it's very hard to judge that.
Speaker #1: And often, when we get the market growth, we get it afterwards. So we are a little bit in the dark, as you are. Different, various institutes are trying to measure it, and they are more often wrong than right.
Speaker #1: So I don't have that. But once we look at the market growth, we want to be ahead of it. So that's the
Speaker #1: target. That's great.
Operator: That's great. Thank you very much.
Speaker #4: Thank you very much.
Speaker #1: Thank
Martin Carlesund: Thank you.
Speaker #2: The next question comes from Jack You Cummings from Berenberg. Please go ahead.
Operator: The next question comes from Jack Cummings from Berenberg. Please go ahead.
Speaker #2: ahead. Good
Jack Cummings: Good morning, guys. My first question is just on North America. I think the North America growth you reported is still a bit slower than what we see in terms of the market rates. Do you think the relaunch of Ezugi is going to help kind of close that gap? That's the first one, and then the second one, you mentioned in the prepared remarks in the, in the release that you're still gonna invest in Europe, but slightly less aggressively. Just wanted to clarify kind of what exactly you mean, that less capacity going in, less studio investment. What does less investment in Europe look like? Thank you.
Speaker #4: Morning, guys. My first question is just on North America. I think the North America growth you reported is still a bit slower than what we see in terms of the market rates.
Speaker #4: Just didn't the relaunch of Azugi is going to help kind of close that gap? That's first one. And then the second one, you mentioned in the prepared remarks in the release that you're still going to invest in Europe, but slightly less aggressively.
Speaker #4: kind of what exactly you mean. Is that less Just wanted to clarify capacity going in, less studio investment? What does less investment in Europe look you.
Speaker #4: like? Thank
Martin Carlesund: Okay, let's start with the end. So less investment is like in comparison to other investments. I mean, we're gonna build a lot of products, new studios. All the Hasbro games that you will see will be built in Europe. So there is a strong investment in the European set, and that will be distributed out there. And we will see to that we cater for all the growth in different markets and adding whatever. But in comparison to, for example, the build-up that you see in Brazil, that is stronger. We need to invest more in relative terms in Brazil to build up that market, and we see that ahead, and that goes for US as well.
Speaker #1: end. So less Let's start with the investment, it's like in comparison to other investments. I mean, we're going to build a lot of products, new studios, all the Hasbro games that you will see will be built in Europe.
Speaker #1: There is a strong investment in the, so, the European set. And that will be distributed out there. And we will see to that we cater for all the growth in different markets and adding whatever.
Speaker #1: But in comparison to, for example, the build-up that you see in Brazil, that is stronger. We need to invest more in relative terms to in Brazil to build up that market.
Speaker #1: And we see that ahead. And that goes for you as well. When it comes to Azugi launch in Europe, we believe that that is the second option for the players and for the operators.
Martin Carlesund: When it comes to Ezugi launched in US, we believe that that is the second option for the players and for the operators, and we believe that we will accelerate the growth with that, of course. We also think that the share of live now, when the market little bit more matures, will increase. So there's potential in that when it comes to, for example, US and North America. What was the first question?
Speaker #1: And we believe that we will accelerate the growth with that, of course. We also think when the market is a little bit more mature will increase.
Speaker #1: that the share of live now Thank
Speaker #1: So there's potential in that when it comes to, for example, US and North America. What was the first question?
Speaker #3: So about North
Joakim Andersson: Was about North America growth and the Ezugi impact.
Speaker #3: America growth and Azugi impact. I think that I
Martin Carlesund: I think that I answered that.
Speaker #1: answered that.
Speaker #4: Yeah. Thank you very much.
Jack Cummings: Yeah. Thank you very much.
Speaker #1: you. Thank you for all the questions.
Martin Carlesund: Thank you.
Operator: Thank you for all the questions. It is now time to hand the conference back to the speakers for any closing comments.
Speaker #2: It is now time to hand the conference back to the speakers for any closing
Speaker #2: Comments. Thank you very much for listening and taking
Martin Carlesund: Thank you very much for listening and taking your time. It was a pleasure to answer your questions. Now, don't forget to click the link. It's a beautiful little film that you can watch, and you will be blown away by the fantastic roadmap 2026. Thank you very much.
Speaker #1: Thank you for your time. It was a pleasure to answer your questions. Now, don't forget to click the link. It's a beautiful little film that you can watch.
Speaker #1: away by the fantastic And you will be blown roadmap 2026. Thank you very much.
