Evolution AB’s leadership has expressed dissatisfaction with the company’s Q3 performance, all coming ahead of a potential legal showdown with rival Playtech.

The Stockholm-listed iGaming developer’s Q3 results showed a 2.4% slowdown in revenue from €519.4m (£451m) the year prior to €507.1m Profit also dropped to €252.3m (Q3 2024: €328.6m).

Earnings for the first nine months of the year tell a slightly more positive story, however, with net revenue up 1.5% to €1.55bn (€1.52bn), although profit still took a hit, down from €866.9m to €755.3m.

“As I have pointed out before, we have not been satisfied with the growth so far this year and that sentiment has not changed in this quarter,” said Evolution CEO, Martin Carlesund.

“However, a difference compared to the first half of the year is that performance in Europe, North America and Latin America is decent to good. Unfortunately, revenue development in Asia is still very far from satisfactory.

“We continue to fight the cyber criminality that has affected our business there for too long, and during the quarter we didn’t progress as much as we would have wanted.”

Evolution and Playtech lace up the gloves

Asia-based cybercrime has been a thorn in Evolution’s side for some time, having been highlighted in Q2 reports earlier this year. Cybercriminals have been hijacking its live stream casino content and rebroadcasting it themselves, cutting off a key source of revenue in the process.

However, given recent developments, revenue and profits are probably not the first thing on Evolution investors’ minds – the company’s dispute with Playtech has grabbed much attention this week, though stakeholders will of course likely be interested in what impact this could have on margins.

Two days ago, Evolution revealed that Playtech had commissioned an investigation and subsequent report conducted into its business by Israeli private investigations firm Black Cube.

The report was published in 2021 and alleged that Evolution has been selling iGaming products in China, Iran and Sudan, where gambling is illegal. Evolution remains adamant that the report’s accusations are false, while Playtech has stood by it. A courtroom showdown between the two seems on the horizon.

Addressing the dispute in Evolution’s Q3 breakdown, Carlesund said: “Four years ago, a defamatory and false report on Evolution was published and disseminated that caused substantial harm to the company and its shareholders.

“As a result of a lengthy legal process to identify the source of this report, we now know that Playtech, a competitor of ours, paid Black Cube, a controversial intelligence firm, to produce the report. At Evolution, we will always go to all lengths to protect our company, our brand, our colleagues and our shareholders.

“Whether it is our efforts to fight cyber criminals in Asia, the resolution of the Georgian strike, or the action we are taking against Playtech and their associates who sought to harm Evolution, we will deploy whatever time, effort and money necessary to defend our firm and its exciting future.

“We are dedicated to setting a strong course for our company and our industry, and you can count on us to continue doing so.”