Live casino supplier Evolution (STO: EVO) recorded a 3.7% year-over-year increase in third-quarter revenue to €526.1 million ($590 million), with CEO Martin Carlesund describing the period as a welcome return to stability despite regulatory uncertainty in Brazil.

Adjusted EBITDA rose 2.7% to €345.9 million ($388 million), although the margin slipped from 66.4% to 65.8%. Net profit declined by 3.6% to €243.3 million ($273 million).

“This was an uneventful quarter, which I believe is something good,” Carlesund told analysts during an earnings call on Friday, October 23.

Live casino remained the company's largest revenue source, generating €443 million ($497 million), up 2.6% year over year. Revenue from random number generator (RNG) games performed more strongly, increasing 10.1% to €83.1 million ($93 million).

Regionally, North America delivered 13.6% growth, while Latin America and Africa recorded increases of 23.1% and 23.7%, respectively.

Europe continued to weigh on performance, however, with revenue from European players falling 4.7% compared with the same period last year.

“No matter the regulatory situation or low channelization rates, we should do better,” Carlesund said during the presentation.

Brazil Gambling Ban Creates Uncertainty for Q4

Brazil was a major concern during the earnings call following the government's decision to prohibit regulated online gambling.

Evolution shut down its Brazilian studio on October 5 and said it remained uncertain when operations could resume.

President Lula, who signed the ban into law, secured an unexpected victory in Sunday's election on October 25. Nevertheless, the prohibition continues to face several challenges.

“It’s highly unfortunate that populistic agenda can overthrow a regulatory framework that has only been in place for one and a half year,” Carlesund said.

He added that Evolution was ready to reopen its Brazilian operations quickly if the government reversed the decision.

Brazil represents less than half of Evolution's Latin American revenue. The region generated €49 million ($55 million) in the third quarter, which was unaffected by the subsequent ban.

Analysts questioned management about whether Brazilian revenue could disappear entirely in the fourth quarter. Carlesund declined to provide a specific estimate of the potential financial impact.

“I think that everyone is flabbergasted about the situation in Brazil, that it is a total negative for anyone in this business that it happens in this way,” he said.

Despite the uncertainty surrounding Brazil, Evolution confirmed that it was maintaining its full-year margin guidance.

Share Buybacks to Slow as Evolution Prioritizes Investment

Evolution has repurchased approximately €1.13 billion ($1.27 billion) of its own shares through the end of September under a broader €2 billion ($2.24 billion) buyback program.

However, CFO Joakim Andersson told analysts that the pace of repurchases would slow during the fourth quarter and the first quarter of 2027, bringing the program more closely into line with the company's cash generation.

“We want to push forward, and we want to be free to make the investment we need, and we want to be self-sustained,” he said.

The company is continuing to invest in its US business as part of its broader expansion strategy.

A fourth studio in New Jersey is scheduled to open during the fourth quarter. The facility will also serve Delaware, bringing Evolution's total number of US studios to eight.

In addition, the company is preparing to introduce Spinning Whale, a new RNG gaming brand developed specifically for the American market.

Evolution's latest results therefore reflect continued growth across several regions and product categories, while regulatory disruption in Brazil and weaker European performance remain key challenges for the business. Its planned US studio expansion and new gaming brand are among the initiatives intended to support future growth.