Zeal Network, a prominent player in the lottery industry, has announced its financial results for the first half of 2024. The company achieved substantial growth, with revenue increasing by 40% year-on-year to €76.8 million ($83.9 million). EBITDA also saw a significant rise, up 46% to €20.1 million. This impressive performance highlights Zeal’s successful expansion and operational efficiency.
Revenue and EBITDA Growth
Zeal Network’s revenue for H1 2024 surged by 40% compared to the same period last year, reaching €76.8 million. This robust growth was driven by a 33% increase in revenue from the core lottery business, which generated €68 million. The company’s EBITDA also saw a notable rise, increasing by 46% to €20.1 million. This strong financial performance reflects the company’s effective strategies and operational excellence.
Customer Acquisition and Revenue Growth
The number of new customers acquired by Zeal Network grew by an impressive 70% year-on-year. This increase in customer numbers contributed significantly to the company’s overall revenue growth. In the core lottery business, revenue increased by 33% to €68 million. The average monthly customer base rose by 21%, reaching 1,353,000 individuals. Additionally, average billings per active customer increased by 2% to €62.48, leading to a total billings increase of 23%, amounting to €507.1 million. This growth in customer base and spending was a key factor in the company’s revenue increase.
Gross Margin Improvement
Zeal Network’s lottery gross margin improved to 13.4% from 12.5% in the previous year. This enhancement was attributed to a favorable change in the product mix and further margin optimizations. The company’s efforts to streamline operations and optimize product offerings have contributed to this positive margin development.
Lottery Business
The core lottery business remains the cornerstone of Zeal Network’s operations, accounting for 88.5% of H1 revenue. The lottery segment experienced a 33% increase in annual revenue, driven by a 21% growth in the average monthly customer base. The increase in average billings per customer and the overall billings growth were instrumental in achieving this revenue increase. The improvement in gross margin further underscores the strength of Zeal’s lottery business.
Gaming Sector
Zeal Network’s gaming sector, launched in June 2023, has shown continued growth from Q1 to Q2 2024. Although a year-on-year comparison is not applicable due to its recent launch, the sector’s positive trajectory indicates promising future prospects. The company’s expansion into gaming reflects its strategy to diversify and capture new market opportunities.
Jackpot Segment
The jackpot segment saw a remarkable 70% increase in player numbers, reaching 592,000. This growth was supported by a reduction in customer acquisition costs, which fell by 26% to €33.20 per lead. Despite this reduction, increased marketing expenses, which rose by 28% to €25.5 million, and higher direct operating and operating expenses contributed to overall cost increases. Direct operating costs grew by 59.3% to €8.6 million, while operating expenses rose by 35.4% to €42.8 million. These cost increases were offset by the higher revenue generated from the growing jackpot player base.
Charity Lottery Launch
On August 1, 2024, Zeal Network launched a new charity lottery, Traumhausverlosung, which offers German players the chance to win a fully furnished home. This initiative reflects Zeal’s commitment to social responsibility and its efforts to engage customers through innovative and meaningful offerings.
Leadership Changes
Zeal Network also announced significant leadership changes. Peter Steiner, Chairman of the Supervisory Board, will be stepping down in 2025 after a 12-year tenure. Additionally, the company is in the process of finding a successor for Frank Strauß, a board member who passed away in May 2024. These changes signal a period of transition for the company as it continues to evolve and grow.
Quotes from Leadership
Sebastian Bielski, CFO of Zeal Network, commented on the company’s strong performance: “The very strong development of revenue and EBITDA reflects our excellent operating performance. We are particularly pleased that we have been able to acquire over half a million new customers since the beginning of the year.
“The acquisition of new customers has not only been exceptionally successful this half year, but also particularly efficient thanks to the significant reduction in acquisition costs per registered new customer. We are thus benefiting from the continuous investment in brand development in recent years.”
Zeal Network’s H1 2024 results showcase a period of remarkable growth and operational success. With a significant increase in revenue, EBITDA, and new customer acquisition, the company is well-positioned for continued success. The improvements in gross margin and the expansion into new sectors highlight Zeal’s strategic focus on innovation and efficiency. As the company navigates leadership changes and launches new initiatives, its strong performance provides a solid foundation for future growth and development.