Zeal Network records 35% YoY revenue growth in Q1 2024

Zeal Network reported a revenue increase of 35% year on year (YoY) to €36.1m in Q1 due to a strong increase in monthly active lottery users (MAU) and gross margin.

The German lottery firm noted “strongly accelerated growth of billings”, with average billings per user rising 1% YoY to €61.59 and billings growing 22% YoY to €246.3m.

Those increases came as MAUs jumped 21% YoY to 1.3 million. Additionally, new registered customers grew significantly by 124% from Q1 2023, with the figure now standing at 320,000.

Management said a “strong jackpot situation at the beginning of January and efficient marketing measures” was responsible for the spike in customer numbers.

Group EBITDA stood at €9.4m, a 0.9% increase YoY, with the firm clarifying the figure was adjusted for a big win at Traumhauslotterie, the first time the main prize was won.

Excluding that win, Zeal said EBITDA would have grown 9% YoY to €10.2m.

Lottery revenue rose 28.3% from €24.9m to €32m and, following the launch of online gaming last June through the LOTTO24 subsidiary, igaming revenue stood at €2.2m.

Net profit after tax came in at €21.1m, a significant jump of 382.1% YoY. This was due, reported Zeal, to “the initial recognition of deferred tax assets on tax loss carry-forwards of Zeal Network SE following the announcement of its squeeze-out request to Lotto24 AG”.

Additionally, marketing expenses went up 91.3% YoY to €13.4m during periods of high jackpots.

Guidance for full-year 2024 revenue has been set at between €140m and €150m, representing growth of between 21% and 29%, based on an average jackpot environment.

EBITDA is expected to come in between €38m and €42m, a rise of 16% to 28% from 2023.

Group revenue for 2023 landed at €116.1m while EBITDA amounted to €32.9m, with the business noting “margin optimisation measures” will drive growth during H2 2024.

The firm also said there is planned investment into the launch of a new charity lottery in the second half of the year.

Elsewhere, the firm confirmed its investment arm, Zeal Ventures will invest €1m into UK-based prize platform Daymade to “help grow its business”.

In a foreword attached to the quarterly report, Zeal stated: “Following an extremely successful fiscal year 2023, in which we not only expanded our core business but also tapped new markets and target groups with the launch of our game business, the first quarter of 2024 was shaped by exceptionally efficient and extensive new customer acquisition measures coupled with strongly accelerated revenue growth.”