Evolution reported revenue of EUR519m and EBITDA of EUR356m for Q3 2024, which can be compared to our estimates of EUR523m and EUR358m, respectively. The disruptions in Georgia had limited impact on both topline and operating costs and adjusted EBITDA-margin came in at 68.5%, which was in line with our forecast. Still, the company has lowered its margin guidance for 2024E where it now expects to be slightly below the range of 69-71%.

While Q3-results were close to our forecast, the short-term growth outlook is somewhat softer. This is mainly owing to an increased uncertainty for Asia which saw lower growth than expected, where the company was negatively impacted by cyber attacks. To reflect the increased uncertainty for the region, we have lowered our growth forecasts to around 13% for 2025-26E in Asia, while we previously expected 15-18%.

Overall, we have lowered topline forecasts by 1% in 2024E and 3-4% for 2025-26E while EBITDA is down 1% for 2024E and 5-6% for 2025-26E. We have also lowered our valuation range on the back of the lowered forecasts, where our new base case stands at SEK1,500 (SEK1,600). Evolution currently trades at c15x EV/EBITDA for 2024E and c12x for 2025E. This can be compared to an average NTM EV/EBITDA of around 21x over 2017-24 while our base case of SEK1,500 implies an EV/EBITDA of 19x 2024E and 17x 2025E.