Evolution revenue slips as CEO signals Galaxy Gaming deal could end

Evolution has indicated that its proposed acquisition of Galaxy Gaming may no longer proceed after CEO Martin Carlesund acknowledged that either party can now terminate the agreement, ending two years of regulatory delays surrounding the transaction.

The comments came as Evolution reported second-quarter net revenue of €517.8m, down 1.2 per cent year-on-year from €524.3m, while EBITDA fell to €341.0m from €345.3m. The supplier maintained an EBITDA margin of 65.9 per cent, with profit for the quarter edging up to €251.4m from €248.3m and earnings per share rising to €1.27.

For the first six months of 2026, net revenue declined 1.4 per cent to €1.03bn, while EBITDA reached €676.3m, representing a 65.6 per cent margin. Net profit was broadly unchanged at €503.4m.

Despite the headline revenue decline, Carlesund said the business had improved on the first quarter, pointing to stronger cost control, improving cash flow and renewed momentum in Europe.

“Overall, I am happy with the performance in the quarter,” he said. “Revenue and margin are moving in the right direction compared to the first quarter, cost control remains strong, cash flow is improving, and we continue to expand in key markets while executing on our product roadmap.”

Europe returned to quarter-on-quarter growth after several weak quarters, while Latin America continued to outperform with revenue growth of 26.3 per cent, supported by the reopening of Evolution’s Argentine studio and the launch of a localised version of Ice Fishing in Brazil. North America grew 9.5 per cent, aided by the rollout of Monopoly Live across four US states and a second Michigan studio.

Asia remained the weakest region, with revenue declining 3.7 per cent quarter-on-quarter as increased cybercrime activity continued to affect performance.

The company also highlighted continued success for its latest product launches, with Ice Fishing becoming one of Evolution’s strongest-performing recent releases, alongside new Hasbro-branded titles Monopoly Roulette and Monopoly Roll’em.

However, the most significant strategic update concerned Evolution’s proposed acquisition of Galaxy Gaming. Carlesund noted that July 17 marks the expiry of the current merger agreement’s outside date, meaning either Evolution or Galaxy Gaming is now entitled to walk away from the transaction.

“Today, the currently agreed closing period under our agreement to acquire Galaxy Gaming expires. After today, either party may choose to terminate the agreement,” he said.

“Two years have passed, and Evolution has spent significant time, effort and resources handling the rather large amount of administration required to close this acquisition. Galaxy is a great company; however, due to its size, the transaction is not significant for Evolution. The outcome has no material impact on our existing business, our US operations, or our long-term ambitions.”

The remarks mark a notable shift in tone from November 2025, when both companies extended the merger deadline to July 17, 2026 and publicly reaffirmed their commitment to completing the $85m acquisition once remaining regulatory approvals had been secured. While neither company has formally terminated the agreement, Carlesund’s comments suggest Evolution is now prepared to move on if the deal does not proceed.

Earlier this week, Evolution also reached a £4.75m settlement with the UK Gambling Commission following a licence review relating to the availability of its content on six unlicensed websites. Carlesund said the matter had been resolved with no broader pattern of unlicensed access identified in the UK.