Zeal Reports 66% Earnings Surge in First Nine Months of 2022

Zeal Network experienced a substantial 66% increase in earnings during the initial nine months of 2022, attracting over half a million new registered members, fueled by a streak of profitable prizes.

In a financial report, Zeal stated that a series of significant wins earlier this year, encompassing numerous record-breaking prizes in the Lotto 6aus49 and Eurojackpot lotteries, resulted in a surge in new participants.

In comparison to 2021, where “the frequency of larger prizes…returned to the typical average,” transaction volume expanded by 10% in the initial three quarters of the year, reaching €544.4 million (£476 million/$542 million), propelling a 14% rise in revenue to €74.5 million.

The first three quarters witnessed 501,000 new registered members, a 12.3% year-over-year increase, with Zeal expressing confidence in the lottery industry’s “robustness” within the broader online commerce environment, which has been impacted by inflation and diminishing purchasing power.

The provider also recently announced a public tender offer, concluding on November 29, 2022, to buy back up to 3.2% of its share capital, aiming to further bolster its financial prospects.

Zeal is pleased with its continuous growth, a testament to the successful strategies implemented in the initial nine months of 2022. This progress is evident in both customer acquisition and performance enhancements, according to Jonas Mattsson, Zeal’s Chief Financial Officer.

The company’s share repurchase program aims to refine its capital structure. Zeal is also committed to expanding its reach through strategic partnerships, targeting new customer segments.

Zeal’s net income surged from €7.3 million to €12.1 million, while pre-tax profit climbed 25% to €22 million.

Despite the impact of rising customer acquisition expenses on profitability, the cost per lead rose by 32% to €36.42. Marketing expenditures increased by 29% to €24.1 million, primarily due to special promotions for free and social lotteries. The company also reported a 22% increase in other operating expenses, reaching €40.6 million, attributed to intensified marketing campaigns.

Based on average prize projections, Zeal anticipates revenue of at least €105 million and profit of at least €30 million in 2022.

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