ZEAL Network (TIMA) Q3 2024 earnings summary

Executive summary

• Revenue grew 41% year-over-year to €121.0 million for the first nine months of 2024, with EBITDA up 51% to €35.0 million and net profit surging 339% to €44.3 million, driven by strong customer acquisition and margin expansion.

• Record 807,000 new customers acquired (+56% year-over-year), supported by efficient marketing and favorable jackpot environment.

• Launched Dreamhouse Raffle (Traumhausverlosung), Germany's first charity house lottery, exceeding expectations in billings and customer reach, and expanding the demographic to younger and more female customers.

• Increased full-year 2024 guidance for both revenue (€158–168 million) and EBITDA (€42–46 million), reflecting strong business momentum.

• Announced a share repurchase offer at €44 per share (10% premium), with up to €25 million allocated, funded by credit facility, and all repurchased shares to be canceled.

Financial highlights

• Revenue rose to €120.95 million (+40.6% year-over-year); EBITDA increased to €34.96 million (+50.9%); net profit after tax was €44.28 million (+338.8%).

• Lotteries revenue grew 35.5% to €107.59 million; Games revenue up 461% to €6.83 million.

• Gross margin improved to 14.5% (up 2.0pp), mainly from a price increase in June 2024 and product mix optimization.

• Personnel costs rose 54% due to higher FTEs, incentive provisions, and wage/tax liabilities.

• Marketing expenses increased 20% to €36.92 million, supporting record customer acquisition and greater efficiency.

Outlook and guidance

• Updated 2024 guidance: revenue €158–168 million (+36–45%), EBITDA €42–46 million (+28–40%).

• Games business expected to deliver ~€9 million in revenue with EBITDA margins above 40% for 2024.

• Continued investment in marketing, with €40–45 million planned for the German core business.

• Midterm revenue growth projected in the mid- to high-teens CAGR through 2026.