Evolution AB Stock

Welcome to Evolution Q2 Report 2026 presentation. [Operator Instructions] Now I will hand the conference over to the speakers, CEO, Martin Carlesund; and CFO, Joakim Andersson. Please go ahead.

Thank you. Good morning, everyone. Welcome to the presentation of Evolution's interim report for the second quarter of 2026. My name is Martin 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, and then we will open up for questions.

Next slide, please. So let's start with the highlights. Net revenues were EUR 517.8 million, corresponding to a year-on-year decline of 1.2%, but a quarter-on-quarter increase of 0.9%. EBITDA came in at EUR 341 million, corresponding to a margin of 65.9%. I'm overall happy with the results in the quarter. Revenue and EBITDA both move in the right direction. The margin is in line with our guidance and cash flow is strong. The volatility in Asia continues to disturb the overall picture, but we will continue to address cybercrime challenges day by day, one quarter at a time, and I'm certain that we will eventually win.

Europe saw a recovery compared to the start of the year with generally good progress across markets. Latin America continues its strong momentum and North America also shows good growth. Live revenue improved with 0.6% compared to the first quarter, but declined 3.6% on a year-on-year basis, mostly related to Europe. At the same time, RNG revenue showed a strong 14% growth year-on-year, and it can be noted that the North American slots business performs well at the moment.

In the quarter, we have launched a second studio in Michigan, which is not only hosting several game shows in the state, but also is the home of our second live brand, Ezugi. And around the quarter end, we also relaunched a studio in Argentina that we acquired from a competitor earlier this year. On the product side, we have launched the first titles under our new Hasbro partnership. So all in all, pretty much business as usual. We keep grinding and moving forward.

Next slide, please. Here, we have our operational KPIs, first consisting of headcount and the Game Rounds index. On headcount, we are growing 2.8% on a year-on-year basis and flat quarter-on-quarter. As highlighted, we have launched 2 new studios in the quarter and are set for yet some more launches later this year. With every new studio, we are optimizing the distribution and cost mix, and I'm happy with. The Game Rounds Index can be seen as a general indicator of activity throughout our network over time. It varies between quarters, but for the long-term trend should be increased as session in general gets faster with small bets. The uptick in Q2 is satisfying, very good.

Next slide, please. Looking at the revenue mix by customer location, it looks exactly the same as in Q1. Europe dominates the picture, followed by North America and Latin America. As we require all our customers to carry license in regulated jurisdictions, all our revenues are regulated. Moving to the revenue split based on our customers' customer, which is an estimation based on the IP number of players received from our customers and purchase third-party information. North America and Africa takes a slightly larger part of the mix, whereas Asia has decreased somewhat. The estimated share of stemming from regulated markets continued to increase and now stands at 49%.

Next slide, please. Now I will go through each of the major regions based on the estimation of revenue based on our customers' customers IP number. Europe saw a recovery quarter-on-quarter. The regulatory subjectivity remains and channelization is very weak in a number of jurisdictions, but we have seen an increasing activity in regulated markets. Are we at an inflection point? It's too early to say, but our strong belief is that the only way to win players to the regulated portion of the market is both a balanced regulation and by offering the best and most entertaining content.

In the quarter, the game category did really good and demand for localized content is on the rise. We continue to work hard and adapt to both the regulatory and the player needs. Later this year, we will launch a new studio in Vilnius in Lithuania. A recurring topic when speaking about Europe has been the license review in the U.K., where we agreed a settlement of GBP 4.75 million earlier this week. I believe the amount is a bit high in relation to the actual issue, but I'm still happy to be able to resolve it and move forward. Throughout the review, we have continued to refine our processes and as you are well aware of, also imposed the strictest ring-fencing measures among any suppliers in Europe. I can't stress this enough at Evolution, we always want to do right. We require all our customers to carry the license needed in a specific market, and we engaged with the regulators to address any issues that arise.

Moving to Asia. As already highlighted, unfortunately, we took a step back compared to the previous quarter. We have said it before that this is a cat and mouse game and the volatility will remain, but we are not stressed. We know what the challenge is. We will continue to battle it, and we look forward to see where we stand in next quarter. Looking beyond the cybercrime issues, performance in the region was good. The regulated Filipino market is growing nicely and the regulatory situation in the region as a whole has been overall stable.

Next slide, please. The strong growth trend continues in both North America and Latin America with an all-time high revenue in both regions. In North America, we have launched Monopoly Live in New Jersey, Delaware, Michigan and Connecticut. Originally released in 2019 in Europe, it is one of our most popular game shows globally. And with Monopoly as a very strong franchise in the U.S., we are excited about to finally bring it to the American audience. After the quarter end, we have also expanded our presence in Alberta in Canada following the introduction of the regulated commercial market. Speaking of North America, I will take the opportunity to address Galaxy Gaming. As everyone is aware, the outside date of the merger agreement is today. After today, either party may choose to terminate the agreement. 2 years have passed, and we have spent significant time, effort and resources handling the administration needed to close the acquisition.

I really think that Galaxy is a great company, and we have had a strong commercial relationship with them for many years. But due to its size, the transaction is not significant for Evolution. That means that the outcome has no material impact on our existing business, our U.S. operations or our long-term ambitions. We will come back in due time on the way forward, and I will not comment it further today.

Moving on to Latin America, where growth remains solid. We continue to adapt our products to the local markets. And in the quarter, we have launched a localized version of Ice Fishing in Brazil. It is hosted by native Brazilian Portuguese-speaking game presenters and stemming from our -- streaming from our Sao Paulo studio. A few weeks back, we also relaunched a studio in Argentina that we acquired, which I also mentioned earlier from our competitor in Q1. It's our second studio in Argentina, and it will support continued growth in the market. We don't display a separate chart for other markets, which mainly comprise of Africa. It's a somewhat volatile region quarter-on-quarter, but with a clear positive trend and its revenue contribution is increasingly noticeable. We have a strong position as a premium live casino supplier, but RNG is also showing good growth.

Next slide, please. I've talked so much about our amazing product road map for 2026. So this time around, I will keep it more concise. During the second quarter, we launched the first title under our new exclusive global partnership with Hasbro, Monopoly Roulette. And earlier this week, we also launched Monopoly Roll'em. The initial response from both operators and players have been very strong, and I believe we are on to something really great. Looking ahead, we have many more titles to launch, but I will speak now on only one, about only one of them. This is actually not related to Hasbro, but the spin-off of our own popular Funky Time, starting with the Funky and the Disco [ Cat. ] As the name suggests, Disco Balls will bring a lot of action with the Disco atmosphere. It will be fun and groovy and set for release during third quarter. It's our major upcoming release. And with that, I will hand over to Joakim for a closer look at our financials. And then next slide, please.

Thank you, Martin. As usual, I will now go a bit deeper into the financials, but let's start with Slide 8 and our revenue and EBITDA development over time. If we look at the data on the far right, we can see the Q2 revenue of EUR 517.8 million, represented by the blue bar, EBITDA of EUR 341 million in the gray bar and the EBITDA margin of 65.9%, shown by the line above. It's another stable quarter that we add to the last few quarters with a small but yet positive revenue increase.

Let's go to the next slide. And on this slide, we have a more detailed look at our profit and loss statement. As before, and you're getting used to this, I have highlighted the key takeaways on the slide, and I will walk through them one by one. First, again, net revenues amounted to EUR 517.8 million, down 1.2% year-on-year, but up 0.9% quarter-on-quarter. Notable here is the continued positive development on the RNG side and solid double-digit growth year-on-year at 14%. Second, total operating expenses were EUR 220 million, which is 1% higher than Q2 last year, but 0.2% down quarter-on-quarter, which helped us expand the margin slightly quarter-on-quarter. Generally, it feels we are on top of it, and we manage our cost base in a prudent way.

Third, with the addition of a positive financial net of EUR 3.1 million this quarter, it all means that the profit for the period amounted to EUR 251.4 million. And then finally, as the fourth highlight, EPS, earnings per share after dilution were EUR 1.27. From this quarter and onwards, there will be a noticeable effect in the number of outstanding shares as a consequence of our buybacks. And in this quarter, we bought back 5.1 million shares.

Let's move on to the next slide, where I will show you the development of our cash flow. First, on the left-hand side, we show our operating cash flow after investments. This amounted to EUR 258 million for the quarter. The last 12 months cash conversion remains strong and ended up at 86%, shown by the line in the same graph. The second quarter is seasonally weak on cash flow due to tax payments or low, I should probably say maybe, but we saw good progress and good positive contribution from the ongoing working capital efficiency initiatives.

Turning to the chart on the right, which shows our capital expenditures. Total CapEx related to tangible and intangible assets amounted to EUR 34.7 million for the quarter. This remains stable as a share of net revenues as illustrated by the black line. Next slide, please. Turning to our financial position. And as you can see, there are no major changes compared to recent quarters. We continue to be in a very strong position with total cash of EUR 1.2 billion. And in the quarter, we used EUR 303 million of our cash towards the buybacks. You can also see that the investment in the bond portfolio was repaid this quarter and booked on the cash line. Total equity amounted to EUR 4.2 billion -- sorry EUR 4.2 billion, and that concludes the financial deep dive for this quarter. Back to you, Martin, for the wrap-up.

Thank you, Joakim. Brilliant. So let's summarize and then move to Q&A. I have on purpose tried to stay to the point -- as much to the point as possible in this presentation. As stated, I believe things are moving in the right direction, and it's very much business as usual in Evolution right now. I'm pleased with the development in Europe, North America and Latin America and Africa. And as for Asia, I believe we will come around.

What I haven't mentioned yet is the share buyback, which also have been gone through by Joakim. It was initiated in May. I know you waited long for the capital allocation decision, and I can assure you that we looked at our options from every possible angle. We are confident that the EUR 2 billion program, which, as far as I'm aware, is the largest ever in the history of Swedish Stock Exchange is the right thing to create additional shareholder value.

Operationally, as we move forward, we will minimize time and resource spent on things that don't really drive business revenue and cash flow. Our main effort will go even with a stronger focus into building world-leading games and release those on the largest online gaming network in the world, our OSS one-stop shop. At Evolution, we love what we do, and we do it with passion. And I want to take this opportunity to thank all of you Evolutionaires in all parts of the world, what a great job you do. So with that, we thank you for listening. And now we open up for questions and the final slide. Thank you.

[Operator Instructions] The next question comes from Ed Young from Morgan Stanley.

I've got 2 now, if that's okay. First of all, could you give a bit more color on Asia? I appreciate you say it's volatile, but I wonder if you could comment on what you think the background trend is in the industry or the underlying because the revenue has been sort of bouncing around in a range for a while now. Is the right reading of that, that the market is flat or your growth is underlying flat or the impacts from these kind of volatile issues greater than that? I'm just trying to get an idea of the underlying trend when you say that you're confident you'll be able to defeat this in the end. That's my first question, please.

Good morning, Ed. Nice to hear you. Asia is a large section on earth. It's not -- it's many countries and they come together something we call Asia. It's not as -- it's much larger than Europe. There are many different countries moving around. I would say that there is an underlying potential growth and the effect that I -- we see right now is coming from cybercrime, and that is the volatility caused. We are focusing to solve that. And unfortunately, it's a little bit up and down still.

Okay. And then second of all, on RNG, we see double-digit growth in the quarter. You called out North America as a good market. I just wonder if you could give a bit more color. Is there any particular game releases that are going well? Or do you think this is part of the broader commercial OSS kind of effort, sales effort that you're making internally? Or is it just North America has been a bit similar and that just a bit more color behind the growth?

We shouldn't overvalue North America and the comment that I made there. It's North America in the greater scheme of things, still a small market in comparison to others. We are doing better. We are now slowly building and coming to double-digit growth, which we talked about for a long time, and that took a long time to get there. But we are here now, and it's from the total situation in RNG, not any specific market. We're happy with that, very happy with that.

The next question comes from Martin Arnell from DNB Carnegie.

My first question, what can you sort of learn from Asia when you were here like in Q3 last year, you had noticeable issues with the cybercrime. And what did you learn there? And any new tools that you can use this time?

We learn a lot all of the time. And Internet in general is moving forward. And I think that we are in the absolute forefront in the cutting-edge possibilities. And even though the volatility is here, I'm quite happy with the situation that we have technically and what we are doing, and I look forward to move forward from here.

And you're not overly concerned that this will be -- get worse before better?

I don't guide on quarter-on-quarter growth for any region, but the volatility is still here. We're not in a stable situation, as you can see.

And then on Europe, I think it was fairly broad-based recovery. Anything you want to highlight that's changed compared to the last set of results?

No. I think that we are happy -- there are still things that makes the business that we do a little bit volatile and then things will move around. But we're happy with the recovery, and we're growing, and you can also see that from the figures. It's a good quarter in Europe.

And my final question is on the games pipeline. You have released some of the Hasbro licensed games, if you can mention anything on the reception so far. But have you tilted the timing for the launches a little bit more skewed to later in the year? Or are you on track with the release pipeline?

I think that the reception of the games have been actually very good. And one thing that we've learned over the years is that you can see that with Ice Fishing, which is a tremendous success. It takes a little while to build that audience that we want to have. So very, very good reception of the games that we are launching. Did we -- are we delayed with the product road map? I would say that the product road map have been a little bit tilted towards the end all along already from when we released it. And we are, of course, wanting it earlier, but it's a little bit tilted towards the end.

The next question comes from Charlie Muir-Sands from BNP Paribas.

I've got a couple, please. Firstly, just on the overall group. I know that you talk about Game Rounds being a long-term directional indicator, but Game Rounds saw quite a nice pickup quarter-on-quarter substantially ahead of the revenue growth. I wondered if you could sort of talk about whether there's any sort of particular temporary or permanent mix effects. And perhaps it's related to this, I wondered if you can talk about what you're seeing in terms of currency headwinds from end player markets and whether those are starting to ease at all in any of those areas?

And then the second question topic is the U.K. You've obviously confirmed the settlement and the financial amount. I just wanted to get clarity that there are no further incremental technical restrictions that you've committed to have to undertake from here. I know you took some actions a while ago. And similarly, also on the U.K. market, whether you've seen any particular change in market behavior since the remote gaming duty tax rate increased in April?

It was a little bit of everything. I will try to remember it. So I mean, we're very satisfied with the Game Rounds development. As we know, entertainment is important. Short attention span is for the coming generations. So it has to be snappy, fun, really entertaining content. We can't stay with what the industry did years and years ago and think that everyone will do the same. It won't happen, and we'll lose out. So Game Rounds will need to increase more than revenue over the coming 10 years. So that you should have in the backdrop. Having that said, we're happy with the development this quarter. Yes, Joakim, you can comment on...

On the FX side, I can pick that up. Yes, you can read in our report in this quarter, it was a little bit less of FX headwinds on the revenue side compared to last quarters. Then if this is kind of a sustainable thing or not, I mean, that's something we can't guess on any of us on the call, I guess. But yes, a little bit lesser headwinds in this quarter.

U.K. Gaming Commission, I mean, we settled with them. There's no -- there's been no changes in our way of doing business in the U.K. for a while, and we have no changes coming out. When it comes to the balance of the regulatory situation in any jurisdiction, not in particular to U.K. But as soon as you raise the tax to a certain limit, to a certain bar, you will lose channelization. You have seen that in many jurisdictions now such as U.K. and the Netherlands. And the channelization reached 50% levels, and that is not good. So we need to see to and hope for a better balance in the regulatory -- what the regulators do. But it's not for us to decide, and we just act on the rules that are there, and we are very respectful to those rules, and we understand why they do them. And of course, raising the tax is negative for the channelization.

Understood. And sorry, just to clarify, when you talked about the 50%, I assume you're referring to the estimates around the Netherlands, not to a new estimate for the U.K.?

I didn't refer to any specific country. But if you reach channelization of 50%, it's, of course, very tough.

The next question comes from Ben Shelley from UBS.

I've got 3 questions, if that's okay. The first one is on Asia. Could you just elaborate more on the cybercrime issues you're seeing in Asia? And are they affecting player access, payments, operator activity or something else?

It's the same as we commented before. It's simply that they take our product, make a copy and redistribute it. That's what they do. So they use our product in one way or the other and they redistribute it and resell it, just like they would do with any bad comparison, but the handbag or anything else that they would make a copy and sell, they will do the same.

Got it. Got it. And then just on recent trends in Asia, have trading trends in Asia improved, worsened or remained broadly unchanged since the end of Q2?

What? Sorry, what do you mean?

So have trading trends improved in Asia since the end of the quarter?

I don't comment within the quarter. We are -- the volatility is in the quarter, as you see, and the figures are there, and we look forward to the next quarter.

Okay. And then just on Europe, Europe has returned to quarter-on-quarter growth for the first time in several quarters. Do you view this as the start of a more sustainable recovery? Or is it still too early to draw that conclusion?

I wish that I had a clear answer to that. I mean I even asked that in the [indiscernible] like is it an inflection point? I'm happy with it. And -- and I look forward to the next quarter. That's the best also in Europe, that's the best I can give you on that. And better activity, nice to see.

The next question comes from Nikola Kalanoski from ABG Sundal Collier.

So the first one is just on the stabilization of Europe. What would you say has contributed to that stabilization on the game show front this quarter? Has it been driven by these relatively new and popular games such as Ice Fishing? Or has the broader game shows portfolio performed strongly, would you say?

I think that all games have performed well. Then, of course, it's Ice Fishing is a tremendous success. It's becoming one of the biggest games in the whole industry. And we have done that before, and we've seen it now. So of course, that contributes. But I don't think that we should overvalue it. It's the total situation that makes the figures.

Yes. And indeed, Ice Fishing looks to be a great game. And then just quickly, I guess, on the U.K. market to the extent that you can answer this question. Curious on the initial impact of this higher remote gaming duty. Have you started to see a significantly negative impact from the tax hike in Q2? And has that adversely impacted your Europe revenue significantly recently?

We don't comment on specific market in Europe, as you know, but a while back also commented on the size of U.K. and U.K. market is not clearly a huge market for Evolution. So even with an impact, it's not that big.

The next question comes from Monique Pollard from Citi.

I have a couple of questions, if I can. The first question was whether you could provide any update beyond what you've written in the press article about the article from Investigate Europe and whether it's possible to access Evolution games on Soft2Bet from the U.K. IP address?

We take all possible measures to make that not possible, and we have not been able to replicate any type of game play that has been stated.

That's clear. And the second question I had, probably one for Joakim is just about the working capital initiatives that you've been putting in place, whether you could give us some examples of those initiatives. And I don't know if you're able to quantify or give us some sense of the benefits that they're providing, please?

Yes, sure. Thank you. I mean we talked about this for a couple of quarters now, and we could see that the trend of accounts receivables were negative for us. We're building and tying capital in receivables up until kind of the peak probably end of last year. So then we talked about it and I explained that we have put some more effort and more resources to really go through the AR and then making sure that our customers pay what they are supposed to pay and they pay on time. So it's kind of those initiatives that we've been working with for a few months now. And even if it takes some time and it does because it's long cycles, then now we see some benefits of that coming through. And kind of you can quantify, you can see in the cash flow statement, and you can see on the AR side that that's, I mean, an effect of increased efforts. So we're quite happy with it, but we continue to work with it as well.

The next question comes from Pravin Gondhale from Barclays.

Firstly, on M&A. Now following the Galaxy development, could you just talk about your M&A pipeline? Are there sort of any other opportunities that you are pursuing size and scope of those opportunities? And then secondly, on cost and margins, could you just offer some steer or color on expected cost development through second half of this year and early next year? And how should we be thinking about the margins from here? Are you comfortable with your previous EBITDA margin guidance issued at last year's full year results?

We constantly evaluate vertically and horizontally if there's any opportunities to acquire something. But I also firmly believe that you should deliver what you state that you should deliver. And that's why even though we don't make a headline of it, but this quarter is the quarter of double-digit growth for RNG, and it took a while, but we're here now, and we're proud of that because we stated that we're going to do that. And that has to do with M&A, but not directly. So we're always evaluating what we could buy. When it comes to cost and margin, I think that we're happy with the progression of margin. We're in line with our guidance for this quarter, and we are in good cost control, managing our cash flow. Joakim and his team is doing a great job. And we are where we should be with those.

And the margin -- the EBITDA margin for the full year remains. So I mean, no question about that.

The next question comes from Karan Puri from JPMorgan.

A couple from my side as well. First one on Galaxy Gaming. I know you mentioned it's not a very meaningful transaction, but just sort of understand better in terms of what went wrong there. That's the first question. Second one on Asia. Is it possible to share some color on the competitive landscape Evolution over the last 12 months? Has competition intensified or been somewhat stable? Any sort of color or data point that would be really helpful.

I won't give more comments on Galaxy Gaming than what I did earlier. We are on the outside date, meaning that the time period for closure is ending actually today. We will now continue to evaluate. It's been -- we put a lot of resource and focus to close and handle the administrative burden that is related to this transaction. And of course, I also point out that as a matter of the size, it's not anything that is significant, and it doesn't affect Evolution's plans or anything else in U.S. or elsewhere. The competitive landscape in Asia, not really changed. I don't notice much change there. There's always been a lot of competition all from the start, and I think it's about the same.

The next question comes from Rasmus Engberg from Kepler Cheuvreux.

Two questions remaining. I don't know if you can answer this, but are there any further regulatory hurdles to complete Galaxy acquisition?

I can't comment on that right now. We are -- we will come to the decision and make an evaluation very soon. Unfortunately, I can't give you more information than that right now.

Okay. And second question, we're approaching the end of the World Cup. How -- has that had any impact on you? Do you anticipate any impact from it in the second half of the year?

Very good question, to be honest. Every time we have these situations when there's a World Cup or Olympic Games, we come in with it and think about that there should be a huge activity boost. Honestly, I -- we don't see that as clearly. It's not in any way negative, but maybe it's the time zone, maybe it was like -- but we don't see that boost out of World Championship. That's the remark.

[Operator Instructions] the next question comes from Jack Cummings from Berenberg.

Two questions, please. First, just on RNG. Obviously, you're now back into that double-digit growth number, you've not been there for, I think it's about 3 years or so I think it was the start of 2023. Are you confident in holding that double-digit growth rate going ahead? And then my second question is on costs. You've talked about kind of cost control within the business. I think headcount was broadly flat quarter-on-quarter. Should we anticipate that if you get back into year-on-year revenue growth, we'll also see growth in headcount and growth in personnel expenses?

We are happy with where we are with the RNG. We look forward to the coming quarters. I won't guide on that, but now we took a good step forward with the 14% growth. So we're happy with that. Coming to the cost control, I think that -- we are still -- and you saw my comment on that, we are adding studios, but we're enhancing the distribution and cost mix. And don't forget that we -- during a while had a very unfavorable cost mix and distribution. So we're coming out of that. And we are in good cost control and look forward also to that part of the year. But of course, if we see a great growth in revenue, we will also expand the cost base and expand the footprint in different markets.

Leading us back to the margin, that's why we also guide on margin, right? So if the revenue is coming up, the cost will come up, but we will then maintain the 66% margin target.

The next question comes from Adrien de Saint Hilaire from Bank of America.

First one, on your Slide #12, you say that you have an ambition to grow in line with the market in your regions in Live and RNG. Do you think that's the case right now in Live? Or might you be underperforming the market? And then maybe for Joakim, can you talk about how much buybacks should be coming through in Q3 and Q4? I think you've spent already above EUR 300 million. So how much should we expect for the remainder of the year and phase between Q3 and Q4?

I think we can always do better. I expect more when it comes to Live growth. So looking forward to the rest of the year. When it comes to the buybacks, Joakim, can you comment?

Yes, sure. I mean for the second quarter now, we have kind of maxed out on what is possible. And it's -- my max is 25% of the daily volumes or the last 20 days daily volumes. What will happen in Q3 and Q4, I mean it's difficult to say. It depends on the volumes in the market, trading volumes, so kind of mathematically and then also on share price, obviously. So if share price goes down or up and the volume changes, then it will be changing for us as well. Having said that as well, I mean, we have a EUR 2 billion program, as you know. And we -- I mean, looking at the cash flow, cash what we have on the balance sheet, we couldn't spend the EUR 2 billion tomorrow. So even if the volumes and share price would be allowing it. So it needs to be phased at the proper level.

The next question comes from Martin Arnell from DNB Carnegie.

I just had a minor follow-up. On the Game Rounds index slide, we can see that it's the highest ever in Q2 after the temporary dip late last year. I think it's up like 12% versus Q4, but your revenue is fairly flattish here. So I'm just trying to understand, is it like mainly driven by the new game shows with lower bet amounts? Or is it also an improvement in the more traditional live table games that you see here?

I'm very satisfied with the development. There's always some lags. It's not only about Game Rounds. It's not only about how many players are on the tables and so on. There's a lot to it and the different markets. The development of the Game Rounds is good, and it's all-time high, and I'm very happy with that. It looks good.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you very much for listening. I appreciate all the questions. Look forward to see you soon again, and I look forward to Q3. Thank you.

Welcome to Evolution Q1 Report 2026 Presentation. [Operator Instructions] Now I will hand the conference over to the speakers, CEO, Martin Carlesund; and CFO, Joakim Andersson. Please go ahead.

Good morning, everyone. Welcome to the presentation of interim report for the first quarter of 2026. 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 an outlook, and then we will open up for your questions. Next slide, please.

So let's start with the financial and operational highlights in the quarter. Net revenues were EUR 513 million, corresponding to a year-on-year decline of 1.5%. EBITDA came in at EUR 335.3 million, corresponding to a margin of 65.4%. The regional development was somewhat mixed in the quarter. Europe is not performing well at the moment, whereas LatAm is having a great momentum. North America continues its steady growth at a slightly higher pace than in Q4. In Asia, we made some further progress on combating cybercrime.

Live revenue was hurt by the development in Europe and declined 3.1% on a year-on-year basis. RNG took a step forward with higher growth than what we have seen in the past quarters, up 8.1% year-on-year. During the quarter, we have continued to expand our studio network with new additions in Latvia, the U.S. and Argentina. We have also started to deliver on our amazing product road map for 2026. I will talk more about that later in the presentation.

Next slide, please. If we then move to our operational KPIs, first, consisting of Headcount and then Game Rounds index. On Headcount, we are growing by 2.9% year-on-year and 1.7% on a quarter-on-quarter basis. We are on a good path with expansion, and we will continue to optimize the distribution and cost mix throughout 2026. The Game Rounds index can be seen as a general indicator of activity throughout our network over time. For an individual quarter, it can vary quite a lot and does not always correlate with revenue development. The long-term trend should be an increase in Game Rounds as game sessions in general gets faster and with smaller bets. I'm satisfied with the development in Q1, especially with the backdrop of the development in Europe.

Next slide, please. In the last report, we introduced a real breakdown of revenues based on our customers location where Europe is dominant. Compared to the fourth quarter, North America and Latin America have grown their respective share of the total revenue, which reflects the overall development in the first quarter. As we require all our customers to carry a license in regulated jurisdictions, all our revenues are regulated.

You also see a revenue split based on our customers and their players, our customers' customer, which is an estimation based on the IP number of players received from our customers and purchased by a third-party geo information. This is the breakdown of the revenues we have included for several years. See from that perspective that all our customers are regulated, our revenue is regulated to 100%. If instead looking at the estimation of the geo position and approximation of revenue based on our customers', customers' players' IP address, about 48% of the estimated revenue is regulated.

Next slide, please. I will now give you a few comments on each of the major regions based on the estimation of revenue based on our customers' customers' IP number. As already mentioned, Europe did not do well and continued to decline quarter-on-quarter, largely due to regulatory volatility and subjectivity, which hurt our player activity.

It has now also been almost a year since we introduced our extensive ring-fencing measures, which ensure that the players can only reach Evolution content from licensed operators within their respective markets. It was the right thing to do. And in the world of perfect regulation, it would not have caused any issues. However, due to that regulation in some markets fails to strike the right balance between player protection and entertainment, players continue to access unregulated operators and channelization is decreasing fast and significantly. This harms the total business and the most vulnerable players lose the player protection of playing of regulated operators and search by products from Evolution.

Looking at the operational side, we have opened a second studio in Riga in the quarter. It is currently the home of our Always 6 Blackjack tables. But later this year, it will host both game shows, Game Night and Monopoly Filthy Rich. Looking at Asia, this is now the second quarter in a row with a quarter-on-quarter growth. This is, of course, a positive signal. We are in a better place right now than a year ago. However, as the challenge has been somewhat of a cat and mouse game, we remain cautious.

Next slide, please. Both North America and LatAm reported yet another all-time high revenues. Growth rate in North America improved compared to the fourth quarter. It looks somewhat soft in our reporting currency, euro, but in U.S. dollars, year-on-year growth was roughly 21% compared to 19% in Q4. In the quarter, we launched several Monopoly theme titles, which have been off to a great start.

Last week, we also launched Monopoly Live in Connecticut, which is an important milestone as we know that the Monopoly franchise is particularly strong in the U.S. market. It will be rolled out in additional states going forward. We have also completed the construction of the second studio in Michigan, located in Grand Rapids. It's a milestone as well. It's now going through inspections and regulatory approvals, and we are expecting to launch it in the next few months, hopefully earlier.

Looking at the regulation, we note 2 positive developments. In the U.S., the main governor has now signed the iGaming bill into law. In Canada, Alberta will regulate its iGaming market in July. We have had presence in the program since 2021, serving the only available online gaming service run by the local government with live casino games. Now the market will open up for more operators.

Last note on North America is the ongoing process to acquire Galaxy Gaming, where we are still working on the necessary approvals before the 17th of July deadline. We don't have any new information to share today more than that the process is ongoing. Latin America is doing really well at the moment. A highlight from the quarter is that we have completed the acquisition of a live studio in Argentina from a competitor who has decided to withdraw from the market. The studio will form the base for further growth in Argentina, and we are now adapting to evolution standard.

In Brazil, we continue to perform well after regulation, which was about a year ago. We have launched a localized version of Crazy Time that is sure to attract a lot of new players in Brazil. LatAm truly is exciting. We're in full expansion mode. In addition to Argentina, we continue to expand our presence in Brazil and in Colombia to fully leverage the big market potential.

With that, we don't have a specific chart for other markets, which mainly comprise of Africa. It continues to grow from a small base. Fresh games are widely popular in the region, and our recently launched Red Baron has so far exceeded expectations. Also, our RMG offering is starting to gain traction. To conclude this slide, the U.S. and LatAm are where we will invest the most in 2026. Both regions have high potential with life still being in early days.

Next slide, please. As you are aware of, we have a spectacular road map for 2026, where we will take fun and entertainment to yet another level. Over the past month, we have made some initial releases like Always 6 Blackjack and Dragon Dragon, but the big splash is still ahead of us. Based on our exclusive partnership with Hasbro, we will continue to expand our portfolio of Monopoly games and closest in time for release of Monopoly Roulette and Monopoly Roll 'Em.

Monopoly is an extremely strong franchise that is continuously gaining more popularity. And I think that it will be an important piece of the puzzle one -- continue to push the boundaries for entertainment. Another exciting development is the introduction of a new feature that we call SciPlay. It will allow players to enjoy slots alongside the live game attraction. With just a click, you will be able to activate selected slots from our RNG brands such as Nolimit City and NetEnt.

Within the live interface, a mini lobby will make personalized recommendation to keep content relevant and engaging. I think this is a great feature as it brings together live casino and slots in one streamlined view, the best of 2 worlds and yet another feature and advantage of OSS, One Stop Shop.

Since Evolution was founded 20 years ago, we've been obsessed with the end user satisfaction and the entertainment factor. And delivering the satisfaction is not just about innovation, it's about getting the fundaments right, every single day, top-notch gameplay, a flawless lobby, world-class studios, a game integrity that set the global benchmark.

We often highlight what's new each quarter because innovation is exciting, but I want to be crystal clear. These basics are absolutely crystal -- critical for the experience because if the fundament slips, end user notice immediately. So with that said, 2026 is going to be another great year of innovation, while we also continue to enhance overall experience with playing our games. The combination of the two will ensure that we will bring the most entertaining experiences to the players and increase the gap to competition more than ever before. With that, I will hand over to Joakim for a closer look at our financials. Next slide, please.

Thank you, Martin. As usual, I have a few slides that will focus on the key highlights as we go through them. Starting with this slide, Slide 8, which shows our revenue and EBITDA development over time. If you look at the data on the far right, we can again see the Q1 revenue of EUR 513 million, represented by the blue bar, EBITDA of EUR 335.3 million in the gray bar and our EBITDA margin of 65.4% shown by the line above.

Let's go to the next slide. And here we have a more detailed look of our profit and loss statement. As before, I have highlighted the key takeaways on this slide, and I will talk you through them one by one. First, the net revenues, of course, amounted to EUR 513 million, which is down 1.5% year-on-year, but practically flat quarter-on-quarter. Second, total operating expenses were EUR 220 million, which is 1.3% higher than Q1 last year and up 2.5% quarter-on-quarter.

Personnel expenses increased by 4% quarter-on-quarter. However, on a rolling 12-month basis, we continue to see a deceleration in the growth rate each quarter. Third, profit for the period amounted to EUR 251.9 million. And as the fourth highlight, our earnings per share after dilution amounted to EUR 1.26.

Let's move on to the next slide, where I show you the development of our cash flow. First, on the left-hand side, we show our operating cash flow after investments. This amounted to EUR 311 million for the quarter, representing a solid improvement compared with Q4, partly driven by a recovery in working capital. The last 12 months cash conversion remains strong and stays around the long-term trend with 81% in the quarter.

Turning to the chart on the right, which shows our capital expenditures. Total CapEx related to tangible and intangible assets amounted to EUR 34.6 million for the quarter. This remains stable as a share of net revenues as illustrated by the black line.

Next slide, please. Turning to our financial position. And as you can see on this slide, there are no major changes compared to recent quarters. We continue to be in a very strong position with total cash of EUR 1.2 billion, including our bond portfolio and total equity of EUR 4.3 billion. With that, I'll conclude my remarks for this quarter. And overall, it was a fairly uneventful quarter from a financial standpoint. I'll now hand it back to you, Martin, to wrap things up.

Thank you very much. So let's summarize and then move to the Q&A. If we look beyond Europe, 2026 has started really good. We grow across all regions. We maintain the margin, and we have started to deliver on the amazing product road map. I'm a little bit frustrated that the majority of our showcase games will be launched during the second half of the year, but they will be worth the wait.

Europe is the main headache right now, but the long-term positive view is intact. I've talked about it many times before. Regulation changes over time. And right now, the balance is not where it should be. But as channelization continues to decrease, regulators will eventually have to adopt -- adapt to protect the players and not by force, but by some regulation, get them back into the regulated part of the market. We're doing what we can to mitigate the current development, working smarter and harder, releasing the best games, pulling the players back.

As highlighted, we will continue to invest mostly in U.S.A. and LatAm alongside our internal focus on product innovation. Some further expansion in Europe will also be needed, but we are naturally more cautious in the short term. I don't want the U.S. litigation against a competitor to take focus from the results, but when a competitor sets aside all rules and deliberately try to hurt us, we must take action to protect our shareholder value.

They have stated that they stand behind the defamatory report. But please remember that they paid enormous amounts of money during 4 years to not be exposed as the commissioner of that said report. Please also remember that the report was based on a success fee structure where the report producer was being paid based on how severely they could hurt our shareholder value.

Evolution works hard. We are methodic. We are patient, and we are very disciplined. We believe in right and have strong and good culture based on morale and solid ethics. And as a last note in the quarter, the Board has proposed that no dividend will be distributed for 2025 as it has assessed that the cash dividend currently is not the best way to create long-term shareholder value. The Board has not made further decisions on the capital allocation for 2026 yet. It's not dramatic, rather refreshing. When further decisions are made, we will let you know about it. So with that, we thank you for listening so far, and now we open up for questions.

[Operator Instructions] The next question comes from Pravin Gondhale from Barclays.

Firstly, on capital allocation, I appreciate that Board of Directors have not decided to propose any dividends. Could you explain what are the reasons behind those decisions? And when can we expect any further communication in this regards? And secondly, on Europe, what are the key countries in Europe where you flagged that channelization is decreasing at faster pace? Has that materially accelerated in Q1? And when do you expect that to stabilize?

On the capital allocation, the Board is responsible for that, and they will take a decision that is creating the most shareholder value, and they are thoroughly and taking this question serious and looking at it. And as a result, they cancel the dividend for 2026. As soon as they have made their analyze, taking the decisions, they will get back and we will communicate what to do with our excess cash. I cannot, at the moment, give any more clarification on that.

When it comes to channelization in Europe, and if we split this in two, channelization in Europe in a number of countries are not really known. The ones that make some of the investigations and estimations of that could be U.K. They have a low channelization. It's dropped significantly over the years. Netherlands, the same, but there are also others such as maybe even Sweden. It's quite hard to get those figures in total as the market -- the unregulated market is growing and not clear. So that's the comment on that. There are also other countries taking other regulatory measures or governmental measures that affect the situation in Europe as well. So that's the background or backdrop to Europe.

And if I sort of follow up on that, could you just elaborate on what is the subjectivity part of the impact, which is impacting the player activity in Europe and in which countries?

I think that -- I will briefly comment on it, but I think that the regulation in many countries stays the same, but the subjective evaluation or the implementation of the regulations have changed. So even though the regulatory framework stays the same, suddenly, it's applied in a different way. That's what I mean with subjectivity.

The next question comes from Georg Attling from Pareto Securities.

Martin and Joakim, I have a couple of questions, starting with Asia. So another quarter of sequential growth. And also when I look at the player data here in April, it looks very strong for Baccarat. So I'm just wondering what makes you reluctant to calling the trend shift here in Asia for the rest of the year.

I think that we need to be cautious. We need to be also prepared for that as I write in that it's a little bit of a cat and mouse game. And we methodically, systematically work on the situation, as you can see, and we're very happy with the 2 quarters in a row where we grow, but we're just a little bit cautious in our communication.

On Europe, another question. You alluded to it earlier, but just wondering, is this a broad-based decline across most countries or focused on a few countries where large declines?

I think you would say that it's a little bit of both. I mean there are war, oil price situation in the world, and it affects, I think, Europe quite a lot. You can also see that it affects the dollar and other. And there are specific countries taking measures and it's a little bit of mix.

Okay. Just a follow-up on that. What do you view is really in your hands when it comes to Europe because there's only so much you can do with the channelization and I assume you're quite keen to stop this negative trend in the region.

End user satisfaction, desire to play Evolution games, strengthen and higher entertainment value. That's the key for us. We are even looking at it like if we do even better games, higher entertainment, we will pull players back into the regulated environment, even though the hurdle has been created, which make them go away. So our core focus, as always, see to that we deliver the best games that the players desire, position them with the operator or the future operators, see to that we always are on top. That's the only thing that will matter in the long run.

That's clear. Just a final question on LatAm, where growth is accelerating quite nicely. Just wondering what do you view as the drivers to this acceleration? Is it market growth, studio expansion, larger game portfolio or something else?

Great games again, end user desire to play our games, studio expansion, market growth situation and so on. It's a good environment to be in. But if we didn't have the games to supply to the market, we would be nothing. So it's a combination.

The next question comes from Nikola Kalanoski from ABG Sundal Collier.

I'm a bit curious on game shows. And so from an outside-in perspective, game shows seem to be growing quite nicely with respect to player count and the category seems to be becoming a larger and larger share of the player count. Are you generally seeing a less volatile revenue profile from game shows compared to some of the other game categories?

No.

Short and sweet. And then a short question on Ice Fishing. Are there any regions in which this game is particularly popular? Or would you say it's equally popular all over the world?

Ice Fishing is a super success, a great game, gaining traction all over the world. Actually, a loved game, one of the best we've made.

The next question comes from Ben Shelley from UBS.

I've got 3 questions. Question one, do you think margins can remain stable year-on-year given Europe and Asia are still declining and you are expanding capacity in Latin America?

I think that the incremental margin and the scalability of our business model is for sure proven this quarter. I think that in spite of the situation in Europe, we delivered good cash flow, fantastic margins, and it shows that the investments that we do are really, really well placed. So my view is yes.

And given channelization issues in Europe, how do you see the outlook for the U.K. amid material iGaming tax hikes? And is there anything interesting you are seeing from operators in the market already?

I think that -- I will answer it in general terms. Everyone in the online gaming sector in one way or the other, if you're an operator or a supplier or even something else, you would know that if you have a tax level that is like somewhere around 25%, 20%, but even 15% is great and 20% works and 25%. But as soon as you hit like the 30% bracket, it starts to be really difficult and you open up for lowering channelization and unregulated play.

When you put taxes on 40% level and a lot of other hurdles, you make it so difficult and not nice for the player experience that players in quite a large amount seeks play -- gameplay outside. I think that, that will slowly come into play. Right now, regulators talk only about what they do as repressive measures, but they don't talk about what happens to the players that are outside the regulated remit. And I think that, that needs to come into focus and you need to find that balance. I look forward to see that balance coming back.

And then just lastly, on competitive intensity in the live casino industry. Are you experiencing any pricing pressures, any loss of share?

We have experienced that all along. I mean, I've been in the company for quite a long time. I think that the only difference is that there are different names related to the competitors. Some during one period it's one name and the second period is another name and so on. The pricing pressure from competition, not able to cover the gaps that we increase all along with the innovation and the game shows we do is always compact. It's always there.

The next question comes from Martin Arnell from DNB Carnegie.

My first question is on Europe and this discussion what's in your own hands and what you can do to improve. How important do you think the new game releases will be for Europe in order to come back to growth?

I have a positive view on Europe going forward. And I think the game releases that we are going to do and also even the games that we already have will have an impact and is super important. I think that some of the games that we do are the creator of gameplay and entertainment and people, persons and end users search those games. So the more of those games that we have, the more pull into the regulated environment we will have.

And many of them are tilted to second half, but you have a few -- is it correct that you have 2 new Monopoly games scheduled for Q2? Correct.

Yes, that's correct. Yes. But the major ones are in the second half. And that's -- I always said it's a little bit frustrating for me, but it takes time. The big game, Game Night, it's a huge game, hundreds and hundreds of square meters of game show and different environment, studios, you go in and you follow the player in those, and it takes time to build. It's not -- it's a really, really complex world that we are creating.

Interesting to look forward to that. And on the -- just also a question on like orders from your clients on new dedicated tables. Has that changed anything dramatically? Or is it stable? Or how do you...

We don't guide on that. I would say that we are continuously doing well.

On dedicated tables orders, okay. And final question would be on this game show discussion, the product mix when it comes to game shows, are the new game shows more lucrative for you than the old ones in terms of like player activity, bet size, et cetera?

I don't -- I'm sorry, I don't guide on profitability per game or new game or old games. I think that the type of games that we do now with the type of Monopoly and Hasbro content is, of course, highly valuable for everyone, us and the operator and the player.

The next question comes from Ed Young from Morgan Stanley.

My first question on Europe, please. You've talked through the channelization angle and the subjectivity part of it. But if I look at your disclosure, the regulated mix is up despite the European decline and some Asia growth. So is it fair to say that this is primarily a decline in your European jurisdictions that are not locally regulated in the quarter rather than the channelization issue, which has obviously been ongoing. The second question...

Okay, let's take one question at a time...

Sorry, let's -- sure.

Otherwise, I will -- due to my lack of memory, probably not answer. You have to look at -- we're growing nicely. everything more or less in LatAm is regulated. We're growing nicely in U.S., adding money there as well, adding a little bit of money in Asia. There is a percentage point here and there and there are decimals to that. So I wouldn't necessarily draw that conclusion to a point. There are other regulations in Europe that are not regulated that are suffering and there are regulated jurisdiction in Europe that are suffering.

Second, you obviously added Playtech to your legal complaint. Can you just maybe give your reflection on where you are now in terms of what you're aiming for through the legal process and on what time line we should expect to get an idea of damages, including punitive damages that you're seeking?

We have had an opponent in this legal debacle that has been ongoing for 4 years, and we have systematically been progressing and winning in court. That's taken 4 years. It will take a very long time. And the opponent that we have is also taking a lot of measures to delay everything, which we have seen in the past, and we expect that in the future as well. So think about years, probably many years.

And then finally, there's been some confusion in some of the questions we've had this morning. So perhaps you could help clear this up. In terms of the Argentina studio acquisition, just to be clear, you've acquired the studio, i.e., the building of a competitor's departed? Or have you acquired a competitor in some of their revenues in Argentina that have contributed to the quarter?

Studio.

The next question comes from Karan Puri from JPMorgan.

Thank you for taking my questions, most of them.

Good morning.

Most of them have already been answered, but just quickly on the Argentina point, I just want to clarify, is there any inorganic revenue contribution coming from that acquisition for LatAm or not? That's...

No, no.

That's -- got it. And the second question, actually, I just wanted to check on the U.K., do you see any further discussions with the regulator on this front? Any idea when this might be resolved?

I have no idea when it will be resolved. Nothing -- no progress to report.

Just one quick one, if I can squeeze that one in. One on the RNG performance. It seems like it came in much stronger than anticipated, at least on a year-over-year basis. Maybe can you provide some incremental color on this, please?

I think we're doing great in RNG right now, fantastic games on Nolimit. We're gaining traction. We are on our way. We systematically methodically work with it, and I think that we're doing better and better.

The next question comes from Andrew Tam from Rothschild & Co Redburn.

Just one for me. We just heard from some of the operators out there about some of the headwinds in terms of the Turkish market. To what extent, just curious, did Turkish weakness contribute to the weak European result?

I won't quantify market specifics in Europe, but that also contributes to the decline in Europe, yes.

The next question comes from Rasmus Engberg from Kepler Cheuvreux.

Good morning.

Good morning.

I took a sleep of comfort, that's why I was a bit slow. That's why I was a bit slow.

In the Americas, both North and LatAm, which business is growing faster? Is it RNG or is it live?

Live is growing faster.

In both?

In LatAm in total, I don't want to go down to a specific number. We're doing a little bit better and better on RNG in total. And it's -- yes, but live is the main show.

Okay. And second question, your rate of expansion with new studios this year compared to last year? Is it higher or lower or roughly the same?

Good question. The decisions we will take during 2026 will be a little bit more forward leaning and expansion will be maybe in actual terms about the same, but we are doing more for 2026, 2027, 2028 this year than we actually did 2025. I look forward to that.

And I don't know if you can answer this, but are you -- is Evolution going to have a Board meeting after the AGM or in conjunction with the AGM?

I actually don't want to answer that to avoid any speculation.

So it's a constituent Board meeting in connection with the AGM. That's correct. Yes.

Thank you.

Thank you, interesting question.

The next question comes from Ben Shelley from UBS.

I just wanted to ask on accounts receivables and compared to your quarterly revenues, they remain elevated year-on-year and broadly stable quarter-on-quarter. Are there any comments or any updates on your Q4 comments here?

Yes, I can pick that up. No, I mean, yes, you said any updates from Q4. Yes, Q4 was definitely on an elevated basis, and we are constantly looking into it, constantly reminding customers, constantly chasing overdues. When we review, there's nothing alarming in there. So we are now kind of more methodological -- whatever that word is, thoroughly doing this work and with a higher discipline than before. So we saw a roughly EUR 10 million reduction during this quarter, and I expect that to continue.

The next question comes from Jamie Bass from Citi.

Just one question from me or 2 parts to one question, I guess. So firstly, are you feeling relatively confident that a solution will be found for Galaxy Gaming before the deadline? And if not, is the deadline you've got now, is that a hard deadline? Or can that be extended again?

I can't -- I don't want to guide on it. Of course, we are working hard to solve everything outstanding, and it's progressing. And right now, the deadline is hard. So then that comes down to, is there any possibility with some to postpone it. Right now, the deadline is hard.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you very much for participating, listening to us here today and looking forward to see you in a quarter again. Thank you. Bye-bye.

Welcome to Evolution Q4 Report 2025 presentation. [Operator Instructions] Now I will hand the conference over to the speakers CEO, Martin Carlesund; and CFO, Joakim Andersson. Please go ahead.

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 will open up for your 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 540 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%.

Asia turned back to modest growth quarter-on-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. 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-on-quarter basis. Our Live revenue declined by 4.5% to EUR 438.6 million while R&D increased by 1.7% to EUR 75.7 million.

I believe our slot brands have great potential ahead. Live is currently affected by both Europe and Asia, while North America and Latin America continued to do well. In the U.S., 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 3 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.

And 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. Operators and players love it and the numbers are steadily increasing.

Since this year, this is an end-year format report, let us also quickly zoom out and look at financials 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 that we have faced, we still managed to defend our revenue and deliver solid margin together with a very strong cash flow. We always want to do better, and we look forward to continuing 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 added Ice in Barcelona and our road map for the year is breathtaking. 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. On headcount, we are growing by 5.8% on a year-on-year basis and 3.8% on quarter-on-quarter. And we now see a better, more cost-effective distribution of all delivery.

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 year -- as this is end year report, we also have yearly KPIs on the customer dependency and a 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. We have decreased dependency on the 5 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 U.S. The resource mix have been improving during 2025, and we look forward to further improvements 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. 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 customers' 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. We believe that we currently have the stringiest -- 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 regulated 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 limit 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.

If looking beyond short-term performance, we see that players shift more and more towards game shows. And with the best road map ever in 2026, aiming at exactly these type of entertaining games rocket [ fueled by asper ] brands, I really look forward to the development in 2026.

Speaking about Europe, we can note that we haven't heard anything from U.K. Gaming Commission since last summer in relation to 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 cyber crime 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. 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 if looking at the U.S. 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 market 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 in Italy and New Jersey. Speaking about U.S., we are still working to get the necessary regulatory approvals to complete acquisition of Galaxy, only 2 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 approval. The process is moving forward, and we are still within the time line of closing before 17th of 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 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. 2026 marked 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 the 4 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 1 studio in Latvia, but as 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. Another aspect of the scale of evolution is that our students are connected in STAR network, and we can use a direct usage independently, creating scalability over all time zones.

Next slide, please. I already mentioned the breathtaking road map 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. 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 4 and Hungry Hungry Hippos. It will use the largest money really in the whole world, but instead of a flatbed 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.

[ Fun enough, ] it will only be the biggest game show for a few months because later in the year, we will launch MONOPOLY Filthy Rich. This will be a gigantic Hollywood-style game show in a studio that would make any moviemakers jealous. With 5 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 2 bonus of games and the MONOPOLY rolling a 2-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 the game, is a simple, fast-paced guessing game will play that on -- where the 2 coins would be yellow, red or both. In Always 6 BLACKJACK, the dealer card is always 6, which provides more predictable game.

From Ezugi, we have [indiscernible] 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 plan 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 to get to any competitor more than ever, but more importantly, we are creating great entertainment for every single player.

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. I'm now on Slide 10, and we'll repeat a few messages that Martin opened up with. Well, on this slide, see our revenue and adjusted EBITDA development over time. The full year 2025 has seen a flat revenue development whilst 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. On this side, we will have a more detailed look at our profit and loss statement. I have highlighted a few key takeaways on 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 had similar adjustments also in Q3 and Q4 2024.

Moving on to the second highlight. 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 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, 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 EUR 306.8 million in the quarter. And for the full year, we had a profit of EUR 1.06 billion. Finally, our earnings per share EPS after dilution amounted to EUR 1.54.

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 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 remained solid and was at 82% for the fourth quarter.

Then turning over to the other graph and 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 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 or the value of the bond portfolio of EUR 104 million. Our total cash balance that amounted to EUR 818 million and equity position that at the end of the year amounted to almost EUR 4.1 billion.

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. 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 2 of them. 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.

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 games, we continued to expand our footprint just as we should. We have also handled many challenges always standing up for what we believe in, always trying to do the right thing.

The situation we have been up -- 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 global build Evolution to the strong company that we are. 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. All in all, we are in spite of the financial development, proud of 2025. But with that said, we want to do more 2026. We will deliver absolutely fabulous product road map 2026. Expansion will be at full speed in the U.S. 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. 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 peak of the amazing road map that you can watch after the call. Please click it and have fun. Next slide, please, and then we'll open for questions.

[Operator Instructions] The next question comes from Ed Young from Morgan Stanley.

I've 3 questions, please. First of all, on the new games, I think for anyone who went to ICE or seen the road map, the opportunity going to see as seems almost obvious with the Hasbro releases. But for 2025, you discussed being really happy with the operational performance that obviously wasn't matched financially. What would it take in '26 for the progress on the content and operational side to be more matched in the financial performance? The second question is, if I'm okay to ask them together...

My memory is very, very good, but short. So now to deliver on 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.

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. 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? How should we think about sequential European growth as we head into 2026?

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 players are pushed out of the regulatory limits. So that affects us. So the total situation in Europe wasn't good in the quarter.

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?

It's not too much smoke signals. It's -- there's a lot of focus on regulatory aspects where players are coming from and so on. 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, then the geographical split of revenues that our customers provided IP adders of their players. And it felt like it was time to disclose that and show that to you -- to put a little bit of emphasis on that.

The next question comes from Georg Attling from Pareto Securities.

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?

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.

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?

We will get back on it. It's just a couple of weeks. It would 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.

Okay. And then just a final question on Asia. I mean it's been very choppy here in the last 3 quarters. What's your view on the underlying development in trying to combat the cybersecurity problems? Has it been stable since the last 3, 4 quarters? Or is it really an underlying improvement here in Q4?

The market development issue has been also shocking a little bit some countries and it's not been super stable, but still good. I mean we had a not-so-good quarter 3, and now we're slowly taking back a little bit. We're happy with that movement, and we're doing a little bit of action; slowly, slowly getting to turn for the cyber criminality and hoping to see better development, of course, forward. But we don't know exactly when that will happen.

Yes. And when you look into '26 in Asia, do you see that this will largely be resolved or will it take longer than that?

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.

The next question comes from Martin Arnell from DNB Carnegie.

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?

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.

So it's also in your hands and not only sort of in how the regulatory markets are working or...

You can always do better. I mean even if we would have a growth of 50% in the quarter for -- and you would ask me, we can always do a little bit more. Now adding the games that we have on the road map 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.

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?

They are flat, I guess. I don't know to find -- they are everyone -- there's no -- everyone looks at the games and like, "Wow, when are we going to get them?" Everyone looks at the games like there is nothing in comparison, there is no one else doing anything else that is even remotely doing what we do. So when they look at our road map, they are like, "Oh, when can we have it?"

Sounds interesting. And when is the first game launch? Is that April on the MONOPOLY, 1 of the 33?

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. But Q1, Q2, a couple of games and then throughout the year.

Final question for me. There was a lot of discussions on AI at Barcelona and ICE, and how could that impact live casino? Can you clarify your view on that?

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 persons, 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. 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.

The next question comes from Monique Pollard from Citi.

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 obviously, 2026, you said similar to the 66.1, you achieved in the 2025. 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 has been coming in slightly weaker than expected?

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. Of course, we simply would have had higher volume on the same capacity. If we wouldn't have had a 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.

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.

Yes, 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, will have an impact on the margin going forward. But that's difficult to speculate on.

Understood. And then the second question was, you mentioned, obviously, the working capital, 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?

Yes, Monique, 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 company, strong financials, maybe we -- customers are a little bit taking advantage of that and then 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 buildup 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 have past year-end. So nothing, no drama, although the numbers were a little bit higher maybe than expected and no drama and then we see the swing back on working capital now.

Okay. That's clear. And then I had a question just on Europe. Obviously, you've mentioned, do you think you now have the strongest ring-fencing measures in place amongst the suppliers. I just wanted to understand whether you had progressively ring-fenced any more market during 4Q in Europe or whether the markets that you ring-fenced back in February with the same that have been ring-fenced out. I didn't know if there had been any progression on your part in terms of what you were doing?

No, it's about the same. There is no big difference. I think that the channelization is one challenge and a little bit instability in general and the market is one challenge during the quarter. And we look forward to get a more stable environment in 2026.

Excellent. And my final question was just on the RNG growth rate. Obviously, that slowed slightly in the fourth quarter after a stronger 3Q. I just wondered whether you think either the road map of product that you've got coming in for RNG in 1Q or other things could sort of help reaccelerate that growth rate as we go through 2026?

I think we can do even -- we can do more in RNG, yes. And I think that, for sure, MONOPOLY, but also our own brands will help a lot.

The next question comes from Ben Shelley from UBS.

So firstly, in the release, you spoke about a primary focus on the U.S. 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?

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 U.S. We're launching Ezugi, and we're expanding in Latin America. So they come out as first where we are doing it. And then as I stated several times, we offer 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.

Very clear. And then just on the U.K. Gambling Commission. I know you still haven't heard anything, but it looks like you have changed your wording slightly in your release regarding the review. Does that reflect the change in your expected outcome?

I don't know anything about outcome more than what I knew before. No, actually no. No, no intentional change in wording. It's just that months passes, and I don't know what to make after that. We're patiently waiting, and we're doing what we are doing. And we have some ring-fencing since the beginning of last year. We'll see. No intentional change.

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. Is it right to think that these markets have stabilized now?

Philippines, more stable, yes. India more stable, yes.

The next question comes from Andrew Tam from Rothschild & Co Redburn.

Just 2 for me. First one, just a segue for 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 given your commitment to the Galaxy acquisition?

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.

Understood. My second question, just trying to assess. It looks like Russia is considering regulating online casino. Will you be applying for a suppliers' license there or are you planning on stopping supply into the Russian market until that legalizes given the Nevada guidance?

We are not. There is a lot of rumors and Putin says one thing or other, I would just spontaneously see it's very difficult to apply for license there, but let's see whatever happens in the world.

The next question comes from Rasmus Engberg from Kepler Cheuvreux.

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?

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 markets. 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.

And 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?

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 [indiscernible] this year or not. But -- so it's a little bit -- Q1 is okay, but a little bit weaker than Q4 on a global scale.

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 -- it's kind of a global question in a way, but...

It's the pillar 2, 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 2, 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.

So no change there?

No change.

The next question comes from Richard Stuber from Deutsche Bank.

I mean 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 here on the next phase of litigation? And similarly, has this impacted 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 in the different regions. Could you just give us an indication what you think the market growth rates are in casino?

There is no real update when it comes to 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. There's no material update. So we look forward to move forward with the lawsuit.

Customer reactions to the way that our competitors 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.

When it comes to -- we have, of course -- we want to take market share. We have the best products we're moving forward, and we really want to grow faster than the market. Now the market growth is -- it's very hard. I mean, our figures are public, but many others are not. 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. 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 target.

The next question comes from Jack Cummings from Berenberg.

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 rate in 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 release that you're still going to 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?

Okay. Let's start with the end. So less 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. 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 U.S. as well.

When it comes to Ezugi launch in U.S., we believe that, that is the second option for the players and for the operator, 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 a little bit more mature, will increase. So there's potential in that when it comes to, for example, U.S. and North America.

What was the first question? I think that I answered that.

Thank you for all the questions. It is now time to hand the conference back to the speakers for any closing comments.

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 road map 2026. Thank you very much.

Good morning, everyone. Welcome to the presentation of Evolution's report for the third quarter of 2025. My name is Martin Carlesund, and I'm the CEO of Evolution. With me, I have our CFO, Joakim Andersson. As always, we will start with some comments on our performance in the quarter and then I will hand over to Joakim for a closer look at our financials. After that, I will conclude with an outlook and then we will open up for your questions.

Next slide, please. So let's start with the financial and operational highlights in the quarter. And I would like to start by taking the bull by the horns and address the bad performance in Asia. This has been a recurring theme over the past quarters. But unfortunately, this time, it looks a bit worse. We were, as you remember, very cautiously optimistic about the remainder of the year in the last report. And there's really nothing that doesn't say that Q4 could be better. However, we are experiencing a lot of volatility, which makes the near-term performance hard to predict. At this stage, we want to be realistic and keep expectations low.

So what are the main reasons behind the Asian development. First is the cybercrime activity that continues to hurt us. Every day and around the clock, we do everything that we can to mitigate the issues. However, some measures do impact also the end users, and this is what makes it tricky. At the point in time, within the quarter, we did too much, causing loss in revenue. On the other hand, if we do too little, we lose to the pilots.

Towards the end of the quarter, we found a better balance, but it's still volatile. And we are -- we do constant security updates to our core to increase protection. We will continue to adapt the changes that are working, and to fine-tune the methods that are working well and explore completely new actions as well. I ask for continued patience on this, but rest assured that is a top priority.

Additionally, in Asia, the newly regulated markets, Philippines is volatile, which often is the case when operators and players adapt to the new framework. There are also other markets, such as India, that show signs of moving towards regulation, which creates a higher level of uncertainty than before. And to clarify, with showing signs, I mean that the current heated debate and quick and not widely acknowledged political decisions is something that we often see in the very beginning of potential regulation. Over a longer period of time, it will likely not be noticeable, but on a quarterly basis, it will cause variations like the one we see now.

With the context of Asia in mind, let's look at the overall numbers. Net revenue came in at EUR 507.1 million, corresponding to a year-on-year decline of 2.4%. EBITDA amounted to EUR 336.9 million, and the EBITDA margin came in at 66.4%, which is within the range of our full year margin target of 66% to 68%.

What stands out as positive in the quarter is the performance in Europe, which is back to growth quarter-on-quarter compared to the first half of the year. We saw the full effect of our protective ring fencing measures in the second quarter, and this provided a new foundation for growth. Worth mentioning is also that we got recognition for our ring fencing from one of the largest regulators in Europe, where we were pointed out as one of the best B2B suppliers. I'm happy with the progress in Europe in this quarter.

North America also performed decently, and Latin America is stronger than what we have seen earlier this year. Our Live revenue declined by 3.4% to EUR 431.7 million, while RNG increased by [ 4.2% ] to EUR 75.5 million. It is actually the first time that RNG outperformed Live in terms of growth. Our studios have worked hard and especially Nolimit City has performed great in this quarter. To further strengthen our portfolio, we have launched a completely new brand, Sneaky Slots from scratch, and it will be very exciting to follow that progress going forward.

On Live, growth is held back by Asia, but we continue to see good growth in the rest of the world. In both North America and Latin America, Live is still in early days and gains considerable attention from operators and players alike. The opening of our new studio in Brazil has been a true success.

On the game side, our highly anticipated Ice Fishing title has finally seen the light, and reception has been great across our market. It is mirroring the trend of faster and shorter forms of entertainment that are widely consumer channels like TikTok and Reels. And it is needed -- is indeed a much faster experience than, for example, Crazy Time. Another great thing is that expansion of Ice Fishing to other studios will be fast compared to the more massive games like Lightning Storm. With its success, we will definitely explore more opportunities in the speed game show arena going forward.

To conclude the quarter, overall revenue is not where I want it to be. But when opening the lead, it's clear that the development comes from 1 out of 4 regions. The development in Europe, North America and Latin America is overall good and also supports the margin together with our clear focus on cost efficiency.

Next slide, please. If we then move to our operational KPIs, consisting of head count and game round index. On head count, we are growing 4.2% on a year-on-year basis, but we have actually decreased 2.7% quarter-on-quarter. The slowdown is, to some extent, reflected in the revenue. We don't hire unless we grow, but looking at recruitment base within full year, there are sometimes fluctuation based on temporarily slower high pace in recruitment. As we plan for more studio expansion over the next years, the long-term trend is that we will see continued increase in the number of Evolutioneers. The game round index can be seen as a general indicator of activity throughout the network over time, as you know. And for an individual quarter, it can be -- can vary quite a lot and does not always correlate with the revenue development. However, as you also can see this quarter, this actually shows a decrease.

Next slide, please. Innovation and quality will always be our signature when it comes to our game portfolio. And I am ever so proud of the continued delivery on our product road map for 2025. During the quarter, we released Ice Fishing, which I have already talked about, and also Dragon Tiger Phoenix, SuperSpeed Dragon Tiger, both the latter are based on a popular Dragon Tiger, a straightforward car game that now has been elevated with the new excitement. Rules are simple and gameplay is quick. In Dragon Tiger Phoenix, the Phoenix is introduced as the third legendary car and the players simply bet on which car that will win or if it will be a tie.

Another very exciting release is the Sneaky Slots brand, which joins our portfolio that already includes Nolimit City, Red Tiger, NetEnt, and Big Time Gaming. We have created Sneaky Slots from scratch, leveraging all our know-how that we have within RNG and using our one-stop shop and global sales network to further boost its launch. Sneaky Slots will fill a gap between Nolimit City and NetEnt in terms of game style. And selected releases will use ex mechanics from Nolimit City that we know that the players love. First title was released -- was NetEnt, which will be followed by the new title every month until year-end.

Among upcoming releases, we have Red Baron, a mix of Live and RNG where the goal is to cash out before the Red Baron flies away. The longer you wait, the higher the potential. Another release is Insurance Baccarat, which is an exciting variation of the classic Baccarat that adds a unique insurance feature to protect the space.

While summarizing the year, we look back at over 110 releases, which is a truly great achievement. And as time flies, there's now only 3 months left until [ Ice ] where we, as always, will showcase the most exciting titles for 2026. I can promise that Todd and his team are ready to take entertainment to yet another level.

Next slide, please. Okay. Let's look at the geographical breakdown. As already highlighted, I'm pleased to see that Europe growth quarter-on-quarter, with revenue amounted to EUR 182.2 million. We have talked a lot about ring fencing this year, and you probably remember that the effects on revenues were a bit larger than we had anticipated. It is a price that we have to pay to stay ahead of the regulatory curve. But with that said, we have a new base to grow from. And despite the summer without any major sports event, development has been overall good.

I should also mention the dialogue with the U.K. Gaming Commission, which continued, and we are yet to receive the conclusion of its review. What I believe is important to note is that we have been very cooperative and also responsive to various requirements that the Gaming Commission has put upon us. We still have to wait for the outcome, but I truly believe that we have the most sophisticated compliance framework among all providers targeting the U.K.

Moving on to Asia, where I have already provided the context for the bad development and revenue decline of 9.6% quarter-on-quarter. Even though the market in Philippines has been volatile, our newly opened studio has been off to a great start. A while ago, there were some media noise on our studio partner losing its B2C license, but it has nothing to do with us or our studio. Everything is working as it should. We did, however, suffer some building damage in the 6.9 magnitude earthquake that struck Cebu in the beginning of October, but to our great relief, no employee was hurt and operations continued, even though that is secondary when people's lives are on the line.

Next slide, please. On the contrary from Asia, North America is, thanks to its regulation, more predictable and stable. Quarter-on-quarter growth is modest, but on the positive side, it is -- on the positive side, the operators continue to invest heavily in Live casino solutions and environment. Year-on-year growth is 14.5%. To meet the demand, we have launched our second Live studio brand, Ezugi, just around the end of the quarter, and we are planning to open a second studio in Michigan during the first half of 2026. I would also like to highlight that we, after the quarter, have launched Crazy Time in Connecticut. Great. Very, very good.

Also, while speaking on North America, I would like to mention something on Sweepstakes as it has been a topic of discussion during the quarter. Sweepstakes is a popular product in the U.S., and we offer it in states where it's not prohibited or in any way under regulatory scrutiny. Sweepstakes is a very small part of our total revenue, but we believe it has some potential. And as you know, as the market leader, we'll want to offer a great variety of content. In the quarter, a city attorney in Los Angeles made a personal interpretation of the California law, and as our strategy is that we don't offer Sweepstakes where there are regulatory uncertainties, we pulled it from the market, simple as that.

I'm also quite certain that you will ask us about the completion of the Galaxy Gaming acquisition. We are still awaiting some regulatory approvals, but believe me, we will be able to -- but we believe we'll be able to close the transaction before year-end. However, it's a regulatory process. It's not completely in our hands.

Moving on to Latin America, where growth is picking up with 6.4% year-on-year and 5.9% quarter-on-quarter. The new regulation in Brazil seems to be done with its initial [ teething ] problems, and operator and players are becoming more active. Our new studio in Sao Paulo, Brazil has developed nicely during the quarter and will expand as we move forward.

Now I will hand over to Joakim for a closer look at our financials. Next slide, please.

Great. Thank you, Martin, and good morning. As usual, I will now zoom in on some of the financial highlights this quarter. Let's start on Slide 7, where we have the financial development of the last 14 quarters.

For the ones that are following us and are used to our format, you will note that we have added the revenue split by regulated and unregulated on this slide. Let's start there. As you can see on the line, regulated revenue is up to 46% of the total this quarter. And even if this will fluctuate between quarters as revenue mix shifts, the longer trend is clear. The portion of regulated revenue will continue to go up.

To the left, as mentioned by Martin earlier, we had net revenue of EUR 507.1 million this quarter, and EBITDA margin of 66.4%. What is not shown on this graph is that we, now year-to-date, are at 66.7% in EBITDA margin, making it within the expected range of 66% to 68% for the full year. As you can see from the chart, our growth has clearly tapered off and even become negative, and this is not something we are happy about, and we can assure you that we are doing whatever we can to reverse that trend.

Let's go to the next slide. And here, we had our profit and loss statement. A lot of numbers on this slide, so I have highlighted the key takeaways, and I will comment on them one by one. So firstly, again, we had net revenues of EUR 507.1 million, which is down 2.4% year-on-year and down by 3.3% quarter-on-quarter. Secondly, total operating expenses amounted to EUR 210.5 million, which is 5% higher than last -- higher than Q3 last year, but more importantly, down 3.4% from last quarter, which is good evidence of our efforts adjusting the cost base to the weaker revenue momentum. We are not only trying to work smarter and be more efficient optimizing how we use our studios and tables, but we are also taking some broad-based cost-cutting measures, which will continue for the rest of the year and into 2026.

Thirdly, our operating profit amounted to EUR 296.6 million in the third quarter. And finally, EPS after dilution amounted to EUR 1.25. To be noted, the profit for 2024 includes EUR 59.7 million of other operating revenue related to reversal of earn-out liability. And so to make it comparable with this year, you should probably adjust for that.

Let's move on to the next slide, where I'm going to show you the development of our cash flow. First, to the right, our capital expenditures. And as can be seen in the graph, we are down quarter-on-quarter, the total CapEx related to tangible and intangible assets of EUR 29.8 million. With that, we are likely going to be slightly lower than the full year forecast of EUR 140 million that we announced in the beginning of the year.

If we then look left, our operating cash flow after investments amounted to EUR 342.1 million in the quarter, which corresponds to a cash conversion of 83%. With that, we are back on track after a seasonally and unusually weak second quarter. The change in working capital was positive EUR 35.2 million this quarter, meaning a swing back from the weaker number last quarter, which is good and in line with our expectations.

Then finally for me, some brief comments on our financial position on the next page. On this page, you will find our summary of the balance sheet for the third quarter compared to what it looked like at the end of last year. The main items that I usually highlight, which are all signs of our financial strength, are the value of the bond portfolio of EUR 103.2 million, our total cash balance that amounted to EUR 656.4 million and the equity position at the end of the quarter, which amounts to EUR 3.8 billion.

We have continued with the buybacks in the third quarter. And in total, we invested EUR 187 million and bought back 2.5 million shares. In total, we have now used EUR 406.5 million of this year's mandate from the Board of EUR 500 million. And following the release of the Q3 report today, we'll be back in the market with an aim to use the full mandate before the year ends.

With that, I will hand back to Martin for his closing remarks.

Thank you, Joakim. So let's summarize the quarter and then move to the Q&A.

Performance in Asia was bad and left a negative impact on the group revenues as a total. But with that said, the rest of the world is doing decent to good, and we are determined to get Asia back on track. I understand that it causes some frustration, especially since we actually saw some signs of improvement in the second quarter. And believe me, I'm frustrated, too. I can only repeat that it requires patience while being a top priority.

I'm happy to see that the margin has improved compared to the first half of the year, and we don't see any reason why -- for it not to stay within our target range of 66% to 68% for the remainder of the year. Cost efficiency is something that I feel strong about as it's part of our roots as an entrepreneurial company. We never spend a penny unless it provides value to the business in terms of growth.

This presentation is about the financial performance in Q3. We don't have a separate slide on the movement in the ongoing deformation litigation in the U.S. We have -- where we have for 4 years finally received information on who was behind the [ false ] report. This process will continue in court, and I will not make any comments about its future development. What I can say is that we believe in fair competition, where innovation and excellent operations count. When a competitor decides not to play by these rules, it hurts not -- it hurts not only us, but the industry as a whole.

With that said, with a little bit more than 2 months left of 2025, we will continue to run, adapt and improve. When we summarize the year from a financial perspective, it will have been a bumpy ride, but from an operational perspective, a very strong and important period for Evolution.

With that, we'll open up for questions. Next slide.

[Operator Instructions] The next question comes from Martin Arnell from DNB Carnegie.

My first question is on -- if we could discuss the Asia situation just a little bit more. I think you mentioned it remains volatile and you, of course, the ambition is to get it back on track. And my question would be, are there any signs that it has bottomed out because the counter measurements, that's in your control, right? So if you have been too stringent, you can adapt. But the regulatory situation and the effect from that is more -- is not in your hands. Is that a correct interpretation?

We are doing everything we can with the countermeasures. And as I said, we did a little bit too much, and we have to do a little bit less, and we'll find the balance. And I think that we are on to it and we're doing the right things. And it's also natural that there will be a situation where you do a little bit too much because otherwise, you won't know where the borders are.

When it comes to the dynamic and the regulatory situation in the region, there's a lot of countries. And right now, there's volatility in some of the regions, some of the countries and that affects us as well. I can't predict much more than that.

And my second question would be, first on Europe, return to growth quarter-on-quarter there. Is that because players finding their way back after the ring fencing through regulated alternatives, do you think?

That's a very good question. And I -- yes, I believe that players in some markets find their way back and want to play a regulated and good compound. So that's probably part of it. And we see good development in total. And I'm actually happy with the development in Europe.

Okay. And final question is just on investments. I mean is there any investment that you could accelerate to improve this current situation in Asia? You've always commented that you will prio growth over margins.

It's -- there is no -- it's not -- if I could throw more money at the problem and I would get a quicker solution, I would do that. I don't see that it's a money issue. We invest and we put the resources -- topnotch resources in the world to do whatever we can. And there is actually -- but don't quote me on that, please, but there is no limitation when it comes to that money. We put revenue and market share before cost, but we also need to adapt to the situation we have. So that's what we're doing right now.

The next question comes from Ed Young from Morgan Stanley.

My first question is on North America. It's showing the best growth across your geographies, but it's still behind market growth. Could you give us an update on the drivers there? What's going well? What's going less well? And do you expect any material change in the growth rate into next year?

The second is on Asia. It sounds like it's a reasonable conclusion from your comments around countermeasures, Martin, you may never be able to fully deal with these issues. So put another way, should we be rebasing fundamentally our Asia revenue and growth expectations? Or on what sort of time line do you have optimism over market growth and market share gains in Asia?

And then finally, I'll ask it. I appreciate giving your very final comment. You may not want to answer, but what are you looking for as an outcome from your legal action? Are you seeking maximum financial damages? You expecting regulators to review your competitors' license suitability? What are you looking for? And what sort of time line do you expect this to play out?

Thanks. I got it. So when it comes to growth in U.S., Live is doing really well. We have a couple of fluctuations, maybe we didn't have the best quarter when it comes to RNG. There are a little bit fluctuations over the quarters, I'm happy with the development. I look forward to the future in U.S. That's the situation in the U.S.

When it comes to Asia, to address this problem, it's technically difficult. It's very advanced, and we're doing it. And we're tuning and we're finding. My belief is over time, that we will find the right balance and the right solutions and continuously enhance and protect our product to make it even better. So in the longer perspective, I look at a very good situation in the Asian market. Now I don't have any -- I can't share any sort of time frame on that right now. I'm a bit more cautious with that.

When it comes to the outcome of the litigation process in U.S., I mean I look for fairness, justice. I think that it's horrible to do what has happened to us. Someone is hiding between layers of companies and hiding the true identity and writing false -- a number of false statements in the report to us. It's unfair. We are protecting the shareholder value of Evolution. The company, as such, defending ourselves from our employees. And the first thing that we look for is some kind of justice, I would say.

The next question comes from Ben Shelley from UBS.

I've just -- I've got 3, if that's okay. On Asia, could you talk a bit more about the developments in India in more detail? What exactly is happening on the ground? And how should we expect this to develop over the coming quarters?

My second question is on North America. Could you talk more about your Sweepstake exposure in the U.S. and how meaningful that is versus your North American revenues?

And three, I was wondering if you could -- if you had any early thoughts on capital allocation for 2026? Do you think EUR 500 million is the right starting point for share buyback expectations for next year?

So the situation on the market in Asia, is a lot of different countries. We point out, Philippines is very volatile right now. There's things happening in India, but there's also other countries that are fluctuating and things are happening there as well. India is a large country. There are regions that have portions regulated when it comes to sports. There's a desire in some regions to regulate. Now there are suggestions on a sort of federal level to take a few steps towards blocking online gaming. These type of movements we often see, when there is talks and happenings about regulation, it opens up for different routes forward. It could go into regulation, it could settle down or it could go to somewhere else. We can't speculate on that. We just see that it's affecting us to a certain level right now.

North America, I think that you asked about Sweepstakes, and Sweepstakes is -- we provide to the Sweepstakes market, where there are no regulatory problems or any legal problems. And we are very lean. We talked to regulators. And if there would be a letter or someone, a regulator or an authority stating, don't do it here, we would immediately go away.

U.S. had the history of river boats that, from the beginning, travel on the river, down to only shore and they have to have the engine running and then they didn't have them, and then it was [indiscernible]. These type of movements have been -- prediction gaming could be one of these. But these type of movements have been there. And we want to supply to them as long as there is no regulatory or authorities saying no. So we did that.

In the case of California, it's a state attorney in Los Angeles that made a personal lawsuit, and that's okay. And immediately when that happen, we withdraw from that. So that we -- okay, if that's what you want, then we will withdraw from that. So that's the Sweepstakes situation.

Capital allocation, I don't want to comment on that. It's, in the end of the day, an AGM decision and a Board proposal. We are acting on the capital allocation that we have. And you also have the capital policy that we published last year, and I'm sure that the Board will continue following that.

The next question comes from Pravin Gondhale from Barclays.

Firstly, on Asia cyber attacks, so yes, we are seeing that. It sort of continues to be a drag on your performance. But do you see any risk of spreading these cyber attacks to your other markets like Latin America, where black market continues to be big?

And then in Europe, can you just give us a sense that between Live and RNG, which have been the key drivers of your European growth on a sequential basis, and any sort of steer on how do you expect European revenues to grow from here?

The protection measures that we add to our core is valid for the whole core, meaning supply to all parts of the world. So one of the upsides in doing what we're doing now with advanced technology and AI and everything is that it also protects our core in other markets and all over the world.

So I would almost say that it becomes a competitive advantage where we increase the gap to competition. And eventually, we make it so hard to steal our products. So if you want to steal the product, you have to go to someone else. So it's protecting everything. So any measure we take in Asia will be accommodated in all of the core. So that's that.

And when it comes to the split in the growth, I mean, we're doing very well right now, momentarily very well, maybe not even showing in the figures in the right way. But when it comes to RNG, we're happy with the development. Nolimit City is delivering great games. And of course, it's contributing in a good way to the total revenue in Europe. Now it's still a smaller part. So Live is the big part. So don't forget that. I mean, it doesn't matter if it does tremendously well. It doesn't affect the figures that much.

The next question comes from Monique Pollard from Citi.

Three from me, if I can, as well. The first was just on the regulated revenue increase we saw in the quarter. And you talk about the sort of direction of travel. Just trying to understand whether that increase in the regulated revenues is driven by the fact that North America and regulated territories performing better than Asia or whether there were some new markets that regulated in the quarter that also added to that progression?

The second question was just on the U.K. Gambling Commission review. You mentioned in the presentation that there's no new news, but also in the report, you say you're expecting a conclusion by the end of the year. So I just wondered what gives you confidence in that time line of end of year, please?

And then the final question is in relation to the news we had a couple of days ago on Playtech Black Cube. I appreciate you don't want to get into the details of the types of damages being sought, et cetera. But it would be really helpful if you could give us some indication of how you look to assess the damages. So is the starting point for assessing damages based on market cap movement on the day that these bits of news became public? Or are there other sort of processes you use when you're thinking about the damages that have been caused by these reports?

The regulatory percentage, 46% in the quarter, good development. We're moving in that direction. That's nice. That comes out of, of course, that the regulated markets are outperforming the nonregulated, and it's affected, of course, by the situation in Asia. So more and more gets to be regulated. And I might remind you that as soon as it tips over to 50% and if the revenue grows equally, it will continue to increase more and more. So we're in a good position with that.

When it comes to the U.K. Gaming Commission time line, unfortunately, I don't have any other information than what -- it's in the hands of the regulator, and we have been -- our estimation is that it will be by the end of this year. I have no further information. That's what it is.

For me, when it comes to the Playtech situation, I mean -- I will say about the same things all over again, but -- when someone behaves in that way, [ hypes ] in -- during 4 years doing this type of action with that type of company that the Black Cube using, Juda as a PR company, it takes a bit away from my belief in humanity and fair play and in ethics and moral. Exactly how we will assess the damages, that's a later question, but it's a severe amount.

The next question comes from Adrien de Saint Hilaire from Bank of America.

So first of all, on Asia, again, it's been a volatile region now for a while. I'm just curious, high level, if there is a point where you might draw a line in your commitment towards that region and refocus towards other markets?

Secondly, you touched on this, but cost of employee was down quarter-on-quarter. Can you explain a bit what's going on there and the sustainability of that?

And then, sorry, this is a bit like technical perhaps, but there's been quite a switch between current liabilities and other noncurrent liabilities in the quarter. Can you explain a bit what's going on there, please?

Okay. I will start with the first 2, and then I will, with warmth, hand over the last one to Joakim. So we look forward and we are engaged, and we actually think it's intriguing, even if it's tough, to find a solution to protect our product in Asia. But I think it will become more and more important also for other markets if we look in a longer time perspective. So we don't have any line that we will draw against Asia. We'll continue to fight that. And as I stated before, it's not about money. It's not a cost that is the problem. It's to find real good solutions on the level for that.

When it comes to cost per employee and the cost base, we have talked about all since actually July 2024, where we have the strike in Georgia in that situation and the cost mix and we had to shift a little bit. So we had an unfavorable cost mix. Now we're starting to be able to shift that, which is what we have talked about during the quarters that we need to have a better and favorable cost mix. It's not like we're cutting delivery right now. It's -- we are putting the delivery in the studios, which are good. So that's the reason why we come to that.

And then I will hand over to you, Joakim.

Of course, the balance sheet question. It's simply a reclassification of earn-out bilities that we have moved from long -- being long term to short term in this quarter as they indeed are shorter than a year. I think that's the one that you are referring to. Well spotted, by the way.

The next question comes from Raymond Ke from Nordea.

A couple of questions from me. I'll take them one by one, starting with no surprise maybe at Asia as well. Compared to, say, Q2, how much of the decline here that we saw in Q3, which is due to cyber attacks, and how much is from regulations and changes in geographies like Philippines and India, would you estimate?

I don't split that out. There are sort of 3 components in the situation. One is cyber attacks, and the cyber attacks is, of course, the constant level of it, but also our action that was a little bit too tough and then we had to retract. And then there is unstability in the region when it comes to regulatory situation. And here, we point out India and Philippines as 2 of those, but there are also others. So unfortunately, I don't want to go into exactly where in detail, and it's also very hard to see that.

Got it. And then regarding sort of the regulatory situation in not just Philippines and India, I understand it. But how many months of impact would you estimate that we have seen here in Q3? If we compare it sort of to ring fencing back in Q1, do we have the full effect? How much should we expect ahead? It would be really helpful to understand.

No, I understand. I assume that you're talking about Asia, right?

Yes, that's right.

So I think that there is a difference between the situation in Europe and Asia, so to speak, but the ring fencing has a little bit of a tail. I think that in Asia, the situation is more momentarily, okay, this is where we are right now, and we need to take it from there. And then we need to see that we do the right things in the coming quarter and see to find the balance.

Got it. And then on North America, your sequential sales growth was flat here in Q3. You had momentum going into Q2 where it added EUR 2 million on top line. How much of the trend here in Q3 would you say is due to withdrawing from California stake? Is it the majority here? Or is there other explanations?

I wouldn't say that, that affects significantly.

And finally, just one more, if I may. Could you maybe help us get a better understanding of how you intend to reach your margin target with the revenue we see here in Q2? How much should come from, say, revenue growth? How much should come from additional cost savings? Is it sort of equal, equal? Or how should we think about that?

No. If I jump in and take that. I mean in Q3, clearly, we are within, right? It has a separate quarter, 66.4% this quarter. And also, as we said, year-to-date, 66.0%. So if we just repeat what we now delivered in Q3, we are there, right? So it doesn't take a lot to make it for the full year, and we are quite confident that we will make it for the full year.

The next question comes from Rasmus Engberg from Kepler Cheuvreux.

Cheuvreux that is. Do you anticipate that India could potentially have an impact also in the fourth quarter? So that's the first question.

I can't comment on that. I don't -- I look at Asia right now, and I'm cautious when I make any predictions due to the situation that it's so volatile.

Fair enough. Can you explain the next step in your legal battle with regards to Playtech? What happens next? And could you also perhaps give us an indication of what the run rate of costs that you're incurring, if possible?

The first question I can answer. It's like -- the thing that happened this week is actually a non -- it's not an action that affects Evolution in any way. When we initiated the litigation, it was with a fake name, [ Joe Roe ], and that was Playtech, but we just didn't know that it was Playtech. So right now, that is just exchanged for Playtech because we finally got the name. So that's what happened. That's -- and then we gave you, to the market, all the information we had relating to that, and that's it. So from our perspective, and the next thing is that there are a number of depositions and potential information that should be shared, and the legal process will continue just like it had been.

When it is -- when it relates to the cost, it's naturally very expensive to do this type of exercises. We do it to protect the shareholders. We do the value for the shareholders. We do to protect the company. We think it's unfair. It's unheard of. It's a behavior that we just don't understand. Now we won't split it out right now, maybe in the future to come, we will look into it. But right now, we don't comment on the exact cost.

The next question comes from Jack Cummings from Berenberg.

Two questions, please. The first is just on the ring fencing in Europe. Is there any more that you still have to do? Or is all of the European ring fencing now completed?

And then just on my second question, I appreciate it's a little bit early than when you normally talk about full year '26. Based upon your comments on cost shift and cost mix, would you expect to see EBITDA margins expand in full year '26 or full year '25?

When I look at ring fencing, I think that we are in a very good position right now in Europe. Things can happen in both directions, but I don't know any other actions that are ahead of us right now.

When it comes to EBITDA margin, we have full focus on 2025 to deliver the 66% to 68%. And we look forward to do that. And then I assume somewhere on a release to Q1 report -- the Q4 report, sorry for that, I'm a little bit ahead of the curve, then we will guide you for 2026. [indiscernible] is positive.

The next question comes from Karan Puri from JPMorgan.

Most of my questions are actually answered. Just one on Europe, I guess, wondering how should we be thinking about a more normalized growth profile in '26 onwards once you sort of lapped the ring fencing adjustments. If you could share a bit on that, would be great.

The answer to that -- I don't guide on the future, but historically, over the time, Europe is the most mature market, and we had a pace of growing 9%, 10%, quite consistently over a number of years. That's the best knowledge we have of the situation. And right now, we are ring-fenced, and we are starting to see a little bit of growth from that.

The next question comes from Andrew Tam from Rothschild & Co Redburn.

Just one question from me. Can I just clarify just your position on India. You talk about the regulatory volatility there. I just wanted to just fully understand what that means. Obviously, you've seen in recent weeks, one of your largest customers globally, decide to exit that market entirely with the real money gambling band. Are you saying that, that is a market that you would look to ring fence as well, should you get some more regulatory clarity going the other way against you?

Ring fencing has to be done in relation to regulation and what is there. We are watching it closely right now, and there are volatility in India, as you understand. At the time, if there would be a ring fencing, that will be later down the road.

Okay. So no plans to ring fence in future in India?

We're watching it carefully right now and see what will be there.

The next question comes from Martin Arnell from DNB Carnegie.

Yes, I just had a follow-up question on RNG, actually because I saw that you had growth improvement there. And could you just say, is it because Nolimit City has a strong edge in the market? Or do you see the market for RNG has improved?

We are doing better and better, slowly, bit by bit when it comes to our RNG offering.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you very much for participating, listening to us. I really look forward to seeing you in a quarter. Thank you.