Zeal’s Financial Info Shows Its Revenues Have Plateaued

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Leading German online lottery products provider Zeal Network has recently published its revenues information for 2021, revealing that its growth has almost plateaued.

Zeal’s Earnings Have Leveled

Looking at the financial report, it becomes clear the first nine months of the fiscal year have earned it but a single percent increase in revenue, compared to the same period last year. According to Zeal Network itself, this suboptimal performance is because of the weak market conditions for lotteries in Germany.

As a point of reference, the jackpot in the European lottery “Eurojackpot” managed to reach $103 million only three times, while last year it capped the same sum a total of six times.

The unimpressive jackpots also had an overall negative impact on billings and gross margin and have, in addition, put off some clients. Although Zeal has reported over 446,000 new registrations, this number is dramatically lower than what it was in 2020. For comparison, Zeal managed to get 787,000 new customers during the first nine months of the previous year. The cost per lead during both years was about $31.62.

Not Everything is Grim for Zeal

Despite the fairly unexciting revenue increase, Zeal Network’s situation isn’t all that grim. Despite the modest advancements, the company hasn’t seen a decrease in revenue. On the contrary, even though the results aren’t all that exciting, they still show a tendency of growth rather than decrease.

Additionally, the company had its billings rise by 5%, currently sitting at $565.77. This means that the gross margin has gone down only by 0.01% (12.3$ in 2020 against 12.2% currently).

Furthermore, the bad jackpot conditions have in turn reduced the company’s marketing expenses. by about $7.7 million, compared to what it spend in 2020. This led to an increase in Zeal Network’s EBITDA by 155% as it hit 20.2 million.

The chief financial officer of Zeal Network, Jonas Mattsson, commented on the results. He is relieved that even though the company’s results aren’t groundbreaking, they still show a tendency of going upwards. Mattsson shared that the whole team is proud to have not lost the momentum despite the significantly weaker jackpot conditions.

According to him, all of this attests to Zeal Network’s ability to read the environment and adopt appropriate measures by “adjusting marketing investments and implementing strong cost discipline to match the market reality.”

“The scalability of our business model will also help us in the future to take advantage of market opportunities, adapt to the dynamic environment and continuously optimize,” Mattsson concluded.

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