ZEAL Network SE Q1 2026 revenue rises despite weak jackpot market

ZEAL Network SE reported an increase in revenue for the first quarter of 2026, despite operating in what it described as a subdued jackpot environment. The company demonstrated continued expansion in its core lottery segment while also advancing strategic investments aimed at long term diversification. However, profitability metrics reflected the impact of increased spending as ZEAL intensified efforts to broaden its product portfolio and reduce reliance on traditional jackpot cycles.

Revenue for the quarter rose by 6 percent year on year, reaching €54.3 million compared to €51.1 million in the corresponding period of 2025. At the same time, earnings before interest, taxes, depreciation and amortisation declined to €15.5 million from €17.7 million, reflecting higher operating costs associated with expansion initiatives.

Strategic execution continues despite challenging jackpot cycle

According to Andrea Behrendt, the company remains firmly aligned with its strategic roadmap, even as jackpot-driven demand remains below historical averages.

“The first quarter of 2026 shows that we are consistently executing our strategy even in a weak jackpot environment: our core business is growing and we have continued to invest in diversifying our business model,” she stated. “Through targeted investments in new charity lotteries such as the Dream Car Raffle, we are laying the foundation for sustainable growth that is less dependent on jackpot cycles. The slightly lower EBITDA compared to the previous year is primarily a reflection of these measures.”

This commentary highlights ZEAL’s deliberate shift away from dependency on high jackpot events, which traditionally drive spikes in user engagement and revenue across the lottery sector. By focusing on structural growth initiatives, the company aims to stabilise earnings across varying market conditions.

Core lottery segment maintains steady performance

The company’s core lottery segment remained a key contributor to overall performance, showing consistent user growth and stable financial output. ZEAL reported that average monthly active users increased by 5 percent, reaching approximately 1.575 million compared to 1.507 million in the previous year.

New customer registrations also showed strong momentum, rising by 11 percent to 274 thousand from 247 thousand. This increase indicates continued success in customer acquisition strategies, even in a less favourable jackpot environment.

Lottery billings grew modestly by 1 percent to €268.0 million, compared to €264.7 million in Q1 2025. While the increase appears incremental, it reflects resilience in user spending behaviour despite the absence of large jackpot incentives.

Importantly, ZEAL recorded an improvement in its lottery gross margin, which rose to 17.8 percent from 17.1 percent. This gain suggests enhanced operational efficiency and improved revenue quality within the segment. Consequently, lottery revenue increased by 5 percent to €48.7 million from €46.3 million in the prior year.

Expansion of charity lottery portfolio

A central pillar of ZEAL’s diversification strategy is the expansion of its charity lottery offerings. During the first quarter, the company prepared for the launch of a new in house product designed to strengthen this segment.

On 14 April 2026, ZEAL introduced the Traumautoverlosung, also marketed in English as the Dream Car Raffle. This product represents the company’s third charity lottery initiative in Germany, following the earlier launches of freiheit+ and the Dream House Raffle.

These offerings are structured to combine entertainment with social impact, appealing to customers who value charitable contributions alongside potential winnings. By integrating philanthropic elements into its gaming portfolio, ZEAL aims to attract a broader audience and build long term customer loyalty.

The introduction of the Dream Car Raffle is expected to contribute to revenue diversification over time, reducing volatility associated with traditional lottery cycles. It also reflects broader industry trends where operators are increasingly exploring socially responsible gaming formats.

Growth in Games segment supports diversification

Beyond its lottery operations, ZEAL continues to expand its presence in the Games segment. In Q1 2026, revenue from this division increased by 14 percent to €3.9 million, compared to €3.4 million in the same period last year.

This growth was driven by the expansion of ZEAL’s business to consumer portfolio, which now includes more than 740 titles. The broader offering enhances user engagement by providing a wider variety of entertainment options, thereby increasing time spent on the platform and overall monetisation potential.

The Games segment plays a strategic role in ZEAL’s long term vision, serving as a complementary revenue stream that is less dependent on jackpot fluctuations. Continued investment in this area indicates the company’s intention to build a more balanced and resilient business model.

Increased investment impacts short term profitability

While revenue growth and operational metrics remain positive, ZEAL’s profitability was affected by higher costs associated with its expansion strategy. The company reported a 13 percent increase in marketing expenses, reflecting intensified efforts to acquire and retain customers across its growing portfolio.

Personnel expenses also rose significantly, increasing by 21 percent. This reflects ongoing recruitment and organisational scaling to support new product development, technology infrastructure and operational capabilities.

These investments, while impacting short term earnings, are positioned as essential components of ZEAL’s long term growth strategy. Management has indicated that such expenditures are deliberate and aligned with the objective of strengthening the company’s competitive position in a rapidly evolving market.

Market context and outlook considerations

The lottery industry is inherently influenced by jackpot cycles, with higher jackpots typically driving increased participation and revenue. In periods where jackpots remain relatively low, operators often experience softer demand.

ZEAL’s Q1 2026 performance suggests that its diversification efforts are beginning to mitigate these cyclical effects. By expanding into charity lotteries and digital games, the company is working to stabilise revenue streams and reduce dependence on external factors.

Looking ahead, the success of newly launched products such as the Dream Car Raffle will be a key factor in determining the effectiveness of this strategy. Continued user growth and engagement will also be critical indicators of long term sustainability.

Conclusion

ZEAL Network SE’s first quarter results for 2026 reflect a company in transition, balancing steady core business performance with strategic investments aimed at future growth. Despite a weaker jackpot environment, the company achieved revenue expansion, supported by increased user activity and improved margins in its lottery segment.

At the same time, lower EBITDA highlights the financial impact of ongoing investment in diversification initiatives, including charity lotteries and the Games segment. These efforts, while reducing short term profitability, are intended to create a more resilient and adaptable business model.

The launch of new products such as the Dream Car Raffle underscores ZEAL’s commitment to innovation and long term value creation. As the company continues to evolve, its ability to successfully integrate these initiatives will play a defining role in shaping its financial trajectory and competitive position within the broader gaming and lottery industry.

FAQs

What was ZEAL Network SE’s revenue in Q1 2026?
ZEAL Network SE reported revenue of €54.3 million in the first quarter of 2026.

Why did ZEAL’s EBITDA decline in Q1 2026?
EBITDA declined due to increased investment in marketing, personnel and new product development.

Who is the CFO of ZEAL Network SE?
Andrea Behrendt is the Chief Financial Officer of ZEAL Network SE.

What is the Dream Car Raffle?
It is a charity lottery product launched by ZEAL in April 2026 as part of its diversification strategy.

How did ZEAL’s user base perform in Q1 2026?
Average monthly active users increased by 5 percent while new registrations rose by 11 percent.

What is ZEAL’s core business?
ZEAL primarily operates as an online lottery broker offering access to lottery products.

How did the Games segment perform?
The Games segment reported a 14 percent increase in revenue driven by an expanded portfolio.

Why is the jackpot environment important?
Higher jackpots typically drive increased participation and revenue in the lottery industry.

What are charity lotteries?
Charity lotteries combine gaming with contributions to social causes, attracting socially conscious users.

What is ZEAL’s long term strategy?
The company aims to diversify revenue streams and reduce dependence on jackpot cycles.