Evolution's 2025

Evolution is facing a clear bifurcation of fortunes in its markets: Sales from the older markets in Asia and Europe face stagnation and even decline. In the meantime, North and Latin Americas as well as the emerging Africa continue to provide much a needed growth. The real headwind against the growth in Asia is player-side saturation rather than piracy. Management has guided for a clear shift in their focus for expansion away from Europe (which also serves Asia) and toward the Americas. However, it is difficult to imagine a realistic scenario where growth in the New World markets would compensate for a decline from the Old World, which offers much higher profit margins. In 2025, sales to top-5 customers declined by a whopping 15%. The end of the seemingly endless growth and the uncertain outlook could force the company to face some hard choices with its cash allocation that it could avoid in the past.