ZEAL Network has recorded a Q1 revenue increase of 42% year on year (YoY) to €51.1m (£44m), thanks in large part to a strong customer acquisition performance from the business.
The German lottery operator’s adjusted EBITDA saw a steeper climb of 88.5% YoY to €17.7m, courtesy of “efficiency improvements and strong sales growth”.
That figure resulted in a corresponding EBITDA margin of 34.7%, up from 26.1% in Q1 2024, despite an increase in marketing costs.
Breaking the firm’s topline figure down by vertical, lottery contributed the overwhelming majority with €45.2m, representing a 41.5% YoY climb.
The more recently launched igaming arm generated €3.4m in revenue, a 55.6% YoY increase.
The improvement in ZEAL’s online casino division was hailed as “excellent progress” by bosses, with the operator’s gaming portfolio now made up of more than 400 titles.
Lottery monthly active users (MAUs) jumped 13% YoY to sit at 1.5 million, a rise credited to both an increased customer base and level of customer activity, as well as “continued successful marketing measures”.
There was also a 19% jump in casino MAUs to 26,000, while average revenue per user (ARPU) within the vertical was recorded at €43.90, the highest that metric has been since igaming operations were established in June 2023.
ZEAL posted €264.7m in billings for the first three months of the year, a climb of 7% YoY from Q1 2024’s total of €246.3m.
Management said the increase was due to a lack of maximum jackpots compared to the same period last year.
That same weaker jackpot environment was cited as a key factor in the 5% YoY dip in average billings per user (ABPU), which fell from €61.59 this time last year to €58.57.
ZEAL posted €9.8m in net profit after tax, a significant 53.4% YoY fall from Q1 2024’s total of €21.1m, with deferred tax assets of €17.2m cited as the main reason behind the decline.
Meanwhile, marketing expenses climbed 16% to €15.5m, as a result of new measures to “tap into new target groups and customers”.
“We started the new year with a lot of momentum and were able to achieve strong results in the first quarter,” said Andrea Behrendt, the newly appointed CFO of ZEAL.
“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.”
ZEAL has issued updated full-year 2025 guidance, with revenue expected to fall between €195m and €205m, while adjusted EBITDA is anticipated to sit around €55m and €60m, which falls short of 2024’s actual total of €61.9m.
The firm also outlined plans to expand its marketing efforts before the end of the year, alongside more investment in charity lotteries.
A foreword attached to ZEAL’s quarterly report read: “The first quarter of 2025 was not only extremely successful for ZEAL, but also highly indicative of our future direction.
“We achieved significant growth in both revenue and profitability, while continuing to add new customers and thus strengthening our position as Germany’s leading online lottery provider.”
ZEAL shares are valued at €48.20, at the time of writing, with a strong Q1 display having little effect on the lottery operator’s stock.
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German lottery operator shrugs off “weaker jackpot environment” to report rises in revenue, adjusted EBITDA and monthly active users
The post ZEAL bosses hail “extremely successful” Q1 display as revenue climbs 42% first appeared on EGR Intel.