Lottery growth drives Zeal GGR increase in Q1, gaming segment climbs 55%

Zeal Network reported a 42% year-on-year rise in revenue to €51.1 million ($58.1 million), during the first quarter. This was largely due to lottery performance, but the group also saw revenue climb within its games division.

This beats the €36.1 million reported in the corresponding period last year, Zeal reported in its Q1 announcement on Wednesday.

Reflecting on Q1, Chief Financial Officer Andrea Behrendt – who took on her new role in April – said the lottery performance was a particular highlight, despite no “peak” jackpots during the period.

The average jackpot for both the LOTTO 6aus49 and Eurojackpot draws was higher than Q1 of last year, although neither reached their maximum jackpot levels. However, revenue and billings still increased, while customer numbers climbed 13%.

“We started the new year with a lot of momentum and were able to achieve strong results,” Behrendt said. “We are particularly proud of the significant increase in our revenue and customer base despite the absence of peak jackpots.

“This shows that our strategic marketing expenditure and our measures to acquire new customers continue to pay off in the long-term and that we are in an excellent operational position. I’m a firm believer in the growth opportunities in our core business in a still underpenetrated market.”

Lottery billings reach €264.7 million

Going into further detail on the lottery business, revenue in Q1 was 41.3% higher at €45.2 million.

Billings – comprising all stakes, including brokerage stakes and associated VAT, net of bets – increased 7.5%. Customer payments were also up by 9.5% to €215.4 million, but average monthly billings per user (ABPU) declined 5%.

Zeal also noted a 133.1% increase in the average number of active users per month (MAU) to 1.5 million. The company said this was mainly due to growth in its customer base during 2024, which is reflected in increased billings.

Zeal sees most growth in online gaming

Accompanying the growth in lottery was an increase in revenue within its games segment. During the quarter, games revenue climbed 54.6% year-on-year to €3.4 million.

Billings from games climbed 45.4% to €45.5 million, with customer payments up 62% to €10.2 million and ABPU also up 22%. In addition, average MAU in Q1 for the games segment was 19% higher year-on-year.

“We also initiated some encouraging developments in the B2B segment,” Zeal said. “The launch of high-profile partnerships with renowned providers such as Tipico and Gamomat will enable us to expand our portfolio and target groups even more quickly in future.”

Zeal also reported an additional €1.5 million in revenue from other activities, including its ONCE business in Spain. This figure is 5.4% more than the previous year.

Lotto24 squeeze-out skews year-on-year profit comparison

Turning to costs, operating spend was higher across the board during Q1. However, the rise in revenue meant EBITDA was able to increase 88.3% year-on-year to €17.7 million.

Amortisation and depreciation costs were higher than the previous year and, after financial costs, Zeal was left with a pre-tax profit of €14 million, a rise of 102.9%.

However, when it comes to tax, the year-on-year comparison is skewed. Zeal paid a total of €4.2 million in income tax this year, whereas in 2024, it received €14.2 million – as a result of the Lotto24 squeeze-out. Last year’s positive tax impact came after the initial recognition of deferred tax assets on tax losses caried forward after the squeeze-out request.

As such, bottom-line net profit this year was €9.8 million, a 53.6% drop from €21.1 million in Q1 2024.