Zeal nets stellar Q1 as lotto sales jump 35%

ZEAL Network SE has reported a substantial 35% increase in its revenue for the first quarter of 2024, reaching €36.1 million, up from €26.7 million in the corresponding period last year.

The company attributes a significant portion of this growth to a 22% increase in lottery billings, which amounted to €246.3 million. This rise is largely driven by a 21% increase in the average monthly number of active customers. Additionally, revenue from its lottery operations rose by 28%, achieving €32.0 million compared to €24.9 million in the previous year.

ZEAL’s games business also showed marked improvement, with revenue growing by approximately 20% from the fourth quarter of 2023, totaling €2.2 million. The segment has maintained a steady gross margin of 7.0%.

The company’s aggressive marketing strategies and customer acquisition initiatives have been key to its success. ZEAL has successfully doubled its new customer intake compared to the first quarter of the previous year.

Despite nearly doubling its marketing expenses and facing a €0.8 million one-off negative impact from a major prize payout in its charity lottery, Deutsche Traumhauslotterie, ZEAL managed a slight 1% increase in EBITDA, which rose to €9.4 million.

CFO Sebastian Bielski provided insight into the financial results, stating, “We made a very strong start to 2024 and were able to significantly accelerate our revenue growth, particularly in our core business of lottery brokerage. Despite almost doubling our marketing expenses and a negative one-off effect from a major win in our charity lottery Deutsche Traumhauslotterie amounting to €0.8 million, we are proud to have achieved EBITDA slightly above the previous year’s level in the past quarter. This demonstrates the swift payoff of our new customer acquisition measures and our ability to generate income across the breadth of our customer base.”

Looking forward, ZEAL is focusing on optimizing efficiency and growth potential. “With the announced squeeze-out at LOTTO24, we are positioning ZEAL in the best possible place for the future and leveraging further efficiency potential,” Bielski added. Additionally, the company’s subsidiary, LOTTO24 AG, received approval to offer an additional 64 games, marking a significant expansion of ZEAL’s games portfolio.

As ZEAL Network SE continues to make strides in the competitive online lottery and gaming market, the strong results from the first quarter of 2024 provide a promising outlook for the rest of the year.