Evolution AB (publ)

Net revenues were EUR 517.8 million, down 1.2% year over year and up 0.9% quarter over quarter. EBITDA was EUR 341 million, implying a 65.9% margin. Profit for the period was EUR 251.4 million and EPS after dilution was EUR 1.27. Total operating expenses were EUR 220 million, up 1% year over year but down 0.2% sequentially. Operating cash flow after investments was EUR 258 million, cash conversion over the last 12 months was 86%, CapEx was EUR 34.7 million, cash was EUR 1.2 billion, and total equity was EUR 4.2 billion. For the business mix, live revenue was up 0.6% quarter over quarter and down 3.6% year over year, while RNG revenue grew 14% year over year. Management said the margin is in line with guidance and the full-year EBITDA margin target remains intact, but did not provide next-quarter revenue guidance.

Martin Carlesund said the quarter was generally good and emphasized that revenue and EBITDA moved in the right direction, with cash flow strong. He highlighted recovery in Europe, strong momentum in Latin America, growth in North America, and continued investment in new studios and new products, including the first Hasbro titles and new launches in Michigan, Argentina, and soon Vilnius. His tone was confident but pragmatic on Asia, repeatedly saying the cybercrime issue is volatile and will take time to beat, while stressing that Evolution is focused on product quality, regulated markets, and shareholder value via buybacks.

Joakim Andersson framed Q2 as another stable quarter, with EUR 517.8 million of net revenue, EUR 341 million of EBITDA, EUR 220 million of operating expenses, and EUR 251.4 million of profit for the period. He noted positive financial net of EUR 3.1 million, EPS of EUR 1.27, operating cash flow after investments of EUR 258 million, CapEx of EUR 34.7 million, 86% cash conversion over the last 12 months, EUR 1.2 billion of cash, and EUR 4.2 billion of total equity. He also said the company bought back 5.1 million shares in the quarter, used EUR 303 million of cash for buybacks, and that the full-year EBITDA margin target remains unchanged.

Analysts pressed management on Asia, asking whether the market was flat or whether cybercrime was masking underlying growth; management said Asia has underlying growth potential, but current volatility is driven by cybercrime and product copying, which they are trying to address. On Europe and the U.K., management said the region improved quarter over quarter but would not call it an inflection point, and confirmed there are no changes coming to the U.K. way of doing business after the GBP 4.75 million settlement. Questions on RNG growth, game rounds, and the new Hasbro launches drew upbeat responses, with management saying reception has been very good and that the product roadmap is tilted toward later in the year.